The price tag to future-proof residential aged care
“Australia is currently building a fraction of the beds we need,” says Ageing Australia CEO Tom Symondson
Ageing Australia CEO Tom Symondson has warned residential aged care providers will need $5-$7 billion every year for the next two decades just to keep up with demand for new beds.
“We built only 800 beds last year when we need 10,000 annually,” he wrote this week in The Australian, noting many are surprised the Commonwealth doesn’t directly fund construction. “That means providers must fund the build cost themselves.”
While Aged Care Capital Assistance Grants of around $300 million annually will assist, and providers' new capacity to retain a portion of Refundable Accommodation Deposits could add $700 million for development annually, “against the scale of the problem, it’s not hard to see we’ll still come up short,” he added.
Tom argues the States must become active partners – co-funding higher-acuity services, helping stand up new models of sub-acute and step-down care, and even seconding clinical staff to help complex older patients transition from hospital to home or aged care. That would also ease state hospital bottlenecks.
His call lands as premiers and the Commonwealth haggle over a new National Health Reform Agreement. Canberra has put an extra $20 billion over five years on the table (on top of $195 billion already planned), but States say it still falls short as record numbers of patients occupy hospital beds waiting for aged care.
By their math, the current offer covers around 35% of hospital costs, below the 42.5% share they say was promised in 2023.
Capital pressures are already biting: in September, many providers scaled back development plans after the AN-ACC price and reweightings came in below expectations.
The message from Tom: without a joint capital plan and integrated care models that keep people well at home and move them safely out of hospital, the build rate won’t lift – and the capacity crunch will worsen.
