The Govt gave us $1 billion dollars, but we are not excited
- $1 billion: Enough for 1,667 beds – just 0.76% of supply.
- Only 11 homes: Australia needs a new one every three days.
- Net growth: Just 802 places were added in 2024-25.
- The answer: Cut red tape and unlock private capital.
Last week’s media release trumpeted the Government has handed out $1 billion for building new beds – our maths says that equals an additional 0.076% supply before closures are taken in. The maths still don’t work.
Since 2022, the Government has allocated $1 billion through the Aged Care Capital Assistance Program. At an indicative development cost of $600,000 per bed, that would fund approximately 1,667 beds.
That is the equivalent of just 11 new 150-bed aged care homes.
Against approximately 220,000 existing operational places, it represents growth of only 0.76%.
The Government’s own estimate is that Australia needs to open one new aged care home every three days. 150 beds at $600K is $90 million. At this rate $1 billion will be spent in 33 days.
Of course, grants are not intended to cover every dollar. SA funding announced last week demonstrates their potential: a $34.5 million government contribution to supporting 268 new beds across five providers, alongside more than $100 million in provider investment.
This assumes a costing per bed of $500K. But it also says only 268 beds are ‘spade ready’ after years of no new development.
The Independent Review of Residential Aged Care Accommodation Pricing found:
“Growth has slowed significantly in the past five years, with only 7,348 additional net places since 2020, at an average of 1,470 per year. In 2024-25, the net increase was just 802 places.”
That is the real number that matters. Not beds announced or funded, but the net increase after closures, decommissioning and the replacement of ageing homes.
Productivity must be the answer
In her recent National Press Club address, outgoing Inspector-General for Aged Care Natalie Siegel-Brown challenged a system that continues to fund administrative waste and preventable decline.
Her message was clear: productivity is not about doing more with less. It is about redirecting money to where it makes a measurable difference.
What is ‘productivity’? It is eliminating the 30% wasteful regulatory burden the sector carries.
Productivity gains will make aged care ‘investible’ and draw in private capital. It will be commercial, fast and efficient.
And remember, the first Baby Boomers hit 84 years of age – the average age of entry to a RAC - in 2029, and there will be 75% more of them.
A billion dollars is welcome, but it is just a pimple on the Baby Boomer rump.
