Australia’s aged care leaders will meet today at an historic summit in Canberra to find ways to ensure the sector can provide sustainable quality aged care services now and into the future.
The Financial Sustainability Summit at Old Parliament House will bring together experts from aged care providers, unions, consumer groups, interest groups, academics and public policy specialists to consider the optimal care funding model for the next 20-30 years.
The Aged and Community Care Providers Association (ACCPA) CEO, Tom Symondson, said that changes to the way aged care is funded are urgently needed, with a rapidly ageing population, and shrinking taxpayer base.
“As a sector we want aged care providers to deliver the highest quality care and support to older Australians so that they can live their best lives. It is what they deserve,” Mr Symondson said.
“Australia currently spends around $34 billion per annum on aged care, or 1.2% of GDP, which is only half of the OECD average.
“How should Australia bridge the gap to ensure aged care providers can deliver quality care now and into the future?
“Two-thirds of funding is provided by taxpayers, rather than individuals, which is placing an increasing burden on the Australian Government’s Budget, particularly with the Baby Boomer generation beginning to require aged care services in larger numbers over the next few years.”
Aged care has emerged as one of the top five spending areas of the federal budget along with the health system, National Disability Insurance Scheme (NDIS), defence and the interest bill on government debt.
“Pressure on the aged care sector will only increase as Australia’s population ages rapidly, and the time to consider structural solutions is now – before it’s too late,” Mr Symondson said.
The Summit will consider questions such as:
- What role can taxation, levies, and social insurance play in the long-term financial sustainability of the aged care system to deliver quality care?
- What are the benefits and outcomes, risks and barriers to each policy option?
- What role can changes to consumer contributions, including means testing, pre-funded financial products, and pay as you go, play in ensuring an equitable and sustainable aged care system?
- If adopted, what principles should underpin consumer co-contributions?
Last month, the Australian Government announced the creation of an Aged Care Taskforce to “review funding arrangements for aged care”, including greater co-contributions by older Australians themselves, with its recommendations to be released later this year.
The Royal Commission into Aged Care Quality and Safety acknowledged that current financing arrangements for aged care are not well designed to support a sustainable system into the future.
The Aged Care Financing Authority (ACFA) has previously found that a sustainable aged care system can be achieved with more co-contributions from older Australians who can afford to make them. The Government’s taskforce will also look into these options.
Mr Symondson said the inescapable fact was that financial pressures on the aged care system will grow over the next 10-20 years.
“Pressure on the aged care sector will only get worse with a rapidly ageing population. Fewer people will be working and more people will require care,” he said.
“More than 4.1 million Australians, or almost 16 per cent of the population, are currently over the age of 65.
“By 2057, that will rise to 8.8 million, or 22 per cent of the population, and by 2097 it will reach 12.8 million people, or one in four Australians. We owe it to older Australians to ensure they have an aged care system they can rely on, today and into the future.”
The Federal Government’s 2020 Retirement Income Review Report found that “most people die with the bulk of the wealth they had at retirement intact”.
Aged Care services provider, CompliSpace, last month released a report that found that almost three-quarters (73%) of Australians are willing to forego some of their inheritance so their older family members can have the retirement they deserve.
ACCPA believes a financially sustainable aged care system should be equitable, efficient and effective across four key dimensions:
Fiscal sustainability: taxpayer affordability of public-funded services, both now and over the longer term.
- Societal sustainability: community satisfaction with the quality of care and support for senior Australians in need, and the equitable distribution of costs and benefits across consumers, taxpayers, providers and their workforces.
- Workforce sustainability: ongoing availability of a sufficient aged care workforce with appropriate knowledge, skills and professional attributes.
- Financial sustainability: provider viability and confidence to invest in the sector.
Key facts:
- Australia currently contributes only 1.2 per cent of its gross domestic product (GDP) to long-term aged care, well below the OECD average of 2.5 per cent.
- The Royal Commission into Aged Care Quality and Safety found there were 4.2 working age (15–64 years) people for every Australian aged 65 years or over. By 2058, this will fall to only 3.1.
- Currently, there are 277,000 paid residential aged care staff across the country, and 222,500 older Australians receiving high-needs care in communal residential facilities.
- According to the Productivity Commission, the average recipient of an inheritance receives about $125,000, is about 50 years old, close to peak earning capacity and established in a house.
