Last week Grant Corderoy and accounting firm StewartBrown reach out to us with a copy of their submission to the Senate enquiry into tax practices, principally by private aged care operators. He said:
“As noted in the submission, we are not advocates other than in ensuring where possible that the actual financial facts (regarding residential aged care) are properly tabled during any discussion and negotiations. So far, this has been missing from much of the mainstream media articles and commentary”.
The 23-page document is essential reading. It succinctly reveals that the government squeeze on residential aged care (RAC) funding is grinding the sector to a standstill.
In FY17 Earnings before Tax (surplus) decreased by 59.9%. Operating return on assets employed (ROA) was negative (0.1%). This all impacts new investment which is required to provide the infrastructure for the growing aged care resident population.
Grant told us by phone StewartBrown “is not seeing the desire” by operators to commit to new development. They are “completing current projects but reluctant to do more”.
StewartBrown produced the submission as an opportunity to “get all the facts on the table, not half the story’.
Corderoy wants “discussion, negotiation and decisions” by government to create certainty through legislation and policy. He calls for the implementation of the Tune Inquiry recommendations.
“I just hope they increase the recurrent funding above the 1.5%; it needs to be around 4%”.
In the article below we will highlight the points around RAC capital investment. Next week we will cover the discussion on home care.
You can download the submission document from StewartBrown HERE.
