The sector reacts to the Budget: aged care leaders weigh in on where the Government has got it right – and wrong

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A mixed response to Tuesday’s Budget with its spending on home care and little else for the aged care sector.

Ian Yates

The COTA Australia CEO told us he was “very pleased” by the 23,000 new Home Care packages delivered by the Budget, noting these are “real” packages that are not simply an advance on those allocated in the forward estimates.

“That’s step one,” he said, “but what’s missing is step 2 and step 3.”

While the Government is expected to deliver more packages, Ian says he would like to see a timetable with benchmarks that set targets for reducing waiting times.

“Someone waiting to get help on a Level 3 can still be waiting for over 12 months,” he used as an example. “It’s absurd so we want to see a schedule for getting these wait times down.”

The COTA CEO says he was also disappointed to see no funding allocated to the abolition of the Aged Care Approvals Round (ACAR) given the Government committed to the measures two years ago well before the Royal Commission.

He was also critical of the decision not to see funding for residential care tied to extra staff in line with the recommendation from the Royal Commission’s special COVID report for extra visitors into residential care.

“We don’t need to know where the Royal Commission is going to land to know that aged care needs more staff,” he said.

He did acknowledge that the Royal Commission has expressed some annoyance about the Government to be making major policy changes ahead of its Final Report in February 2021, which could be behind the reluctance to spend more now.

“There seems to be a certain reluctance to be seen to be preempting the Royal Commission,” he concluded. “That is a political conundrum for them.”

However, Ian welcomed the $10.3 million for the Aged Care Workforce Industry Council and $11.3 million for additional dementia services and training programs.

“It’s only a smidgen of what we would be expecting to see in terms of workforce improvement in next May’s Budget.”

COTA has high expectations for the next Budget in terms of both the quantum of money and the policy settings, Ian added.

“This is not the aged care budget,” he concluded. “The next one is the aged care budget but this is a significant advance.”

Nick Loudon

The outspoken Envigor CEO and Managing Director (and LASA board member) says the Budget reflect the Government’s attitude towards the sector.

As a home care provider, he welcomes the new Home Care Packages, but says the decision to ignore the current financial situation of the sector suggests the increase in HCPs was a political decision to take the pressure around waiting lists off the Government.

“It completely overlooks that the additional money doesn’t even come close to covering the costs of COVID, particularly for Victorian operators,” he said. “It doesn’t even equate to the amount that Morrison as the Treasurer took out [in 2016]”.

Nick says it is clear the Government will do little until the Royal Commission delivers its Final Report because the votes are not in aged care.

He accepts that this Budget was not intended to overhaul funding to the sector.

“This Budget isn’t about fixing all of the ails of society, it’s about getting the economy back to where it was,” he stated. “You can’t knock the Government for that but response to aged care shows that it is really just a political response to pressure from the Royal Commission.”

Nick also warns that the Government will not find it so easy to obtain the support of the sector going into the next election.

“It’s just become beyond a joke,” he said. “How many times do they have to be told of the status of the industry and continue to ignore that?”

Derek McMillan

The Centennial Living CEO has a different take on the Budget, given his Melbourne-based location.

Derek says currently in Victoria, the Budget is taking a backseat to the Government’s response to COVID.

“That has a far more profound impact, not only in the short term but in the next 12 to 18 months,” he said, pointing to the 5km restrictions that prevent people from inspecting villages and facilities if they live outside the radius as an example.

He says there is a heightened sense of pent-up demand for retirement and assisted living, but also uncertainty as the impact of the pandemic on business and employment affects how quickly people can sell their homes.

“Normal activity has been suppressed about making a significant move,” he said.

Derek foreshadows low migration levels and wages growth will continue to impact on house prices.

“That has been offset a little bit by the tax cuts and lower interest rates, but if people have concerns about borrowing, they are still not going to buy their first home or upgrade to their second.”

The CEO also raises concerns about the new Home Care Packages, saying it is a “bit of an insult” that they are being lauded as a great victory when the wait list would be far higher if people were able to access My Aged Care more easily.

“There are far more people who require HCPs than there are on the list,” he stated.

“It really is a drop in the ocean and does call into question something that I have argued for a long time which is that rationing is just such an indiscriminate way to manage Government expenditure.”

Derek says the Government should directs its measures towards better means testing and payment arrangements for home care such as a HECS-style model a la Paul Keating, using the example of an 85-year-old woman living by herself receiving a package after someone else who has been in the waiting list for longer but with more supports.

“With an ACAT assessment, you should be able to access services, even if you pay more than someone else.”

Rachel Argaman

The Opal CEO has seen the ‘silver lining’ in the Budget – in particular, the Federal Government’s announcements to expand the Apprenticeships and Training programs, in addition to the instant write offs for Investments in Eligible Assets.

“There has never been a more important time to invest in the aged care workforce and the wage subsidies available under the apprenticeships and training programs will enable Opal to consider a number of apprenticeship opportunities, including an apprentice chef program for the first time to continue our  focus on improving the food experience for our 7,000 residents,” she said. “Carer recruitment and training will also be prioritised as a result of this new funding initiative.”

Rachel also acknowledged the support already provided by the Government to the sector during the pandemic.

“The most recent funding has allowed Opal to enhance its infection control capabilities, cover increased staffing costs particularly on weekends, improve communications with families and better manage visitation arrangements,” she stated. “It has also helped us to address specific costs for homes in outbreak. Our direct care team are also grateful for the well-deserved third retention bonus payable to team members in November.”

However, the CEO is looking forward to the Government’s response to the Royal Commission’s findings next year.

“This will be the opportunity to reset the sector’s funding to address the viability challenges comprehensively documented by the commission, and also to allow us to continue to innovate and to put in place the technology and systems which enable us to provide the person-centred care which is at the heart of resident well-being, and add to our training and leadership programmes.”

Pat Garcia

The CEO of Catholic Health Australia has labelled the Government’s Budget response to the aged care sector a “modest contribution” in shoring up the industry.

“This was not entirely unexpected,” he conceded. “As the Treasurer indicated in his Budget speech, the Federal Government is waiting for the Final Report of the Royal Commission to be published before it delivers any significant funding or reform measures to the sector.

“But, with many aged care facilities operating at a loss, and looking at successive annual losses, there is a genuine concern that some services may be facing closure.”

Pat points out that the new residential funding model to replace ACFI which is under development, and the creation of an independent pricing authority for aged care being canvassed by the Royal Commission, are still years away from being implemented.

“What we needed from this Budget was an interim solution to the acute financial pressures being faced right now but instead the Government chose to provide some additional funding under a Business Improvement Fund,” he stated.

“Whilst this fund will help some providers to undertake business improvement activities; it also has a focus on facilitating the exit of poor financial performers either through sale or orderly service closure.”

“The additional $36.5 million provided for the fund may indeed help some operators but it’s a fraction of what is needed to keep the sector afloat ahead of the implementation of a new funding model.”

Judy Martin

Our own Director – Industry Engagement for DCM Institute and Chair of the Global Ageing Network (GAN) had a simple summary, saying that the Government’s lack of response to the demonstrated need for increased aged care funding has left the sector reeling.

“Is there any respect for the sector and thus older Australians?” she asked.

“With 100,000 older Australians waiting up to 18 months for home care, how does $1.6 billion for 23,000 additional home care packages go to solving the problem. The lack of available Home care places means many Australians are entering residential aged care prematurely. The problem is known – the Budget has ignored the problem.”


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