Most pundits will say that the changing Federal Government will have no impact on the retirement living sector, given that it and the land lease sector are all state legislated. But I don’t necessarily agree.
The Federal Government can impact retirement planning and finances through taxation, superannuation and health policies.
Mr Morrison promised an extra $300,000 in super can be placed by people over 55 when they sell the family home to downsize, releasing large housing stock. This has the potential to budge people to downsize to villages.
That was a short-term strategic initiative. And Labor immediately matched it.
Mark Butler & Self-Funding
There are two factors in favour of a positive impact by the change in government on retirement living.
The first is that Mark Butler will become the Minister for Health and Ageing.
He has an excellent understanding of the seniors’ landscape, having been the Minister for Ageing between 2010 and 2013. He was sufficiently interested to actually write a book after Rudd 2 lost government.
The second reason for the Federal Government to engage with the village sector is that it is self-funding – there is no Government subsidy. And yet villages keep older Australians out of home and residential care longer.
Recommendation 4 of the Aged Care Royal Commission reads like a strategy document for the village sector as well:
With the massive cost of a 25% pay rise likely for aged care staff from the Fair Work Commission, requiring $4.3 billion alone, the Federal Government has no choice but to look for alternative models.
It is up to the sector to make the most of these openings of course, but it has not got a strong track record.