How Australia can afford to fix the aged care sector

By Cameron Micallef

May 10 2021
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Australia needs to find $10 billion to fix the broken aged care sector but is likely to commit to only a quarter of the funds required, with a think tank showing how Australia can afford to implement the aged care royal commission findings.

A new report released by The Australia Institute suggests Australia can afford to implement world-class aged care through slight raises in the tax system.

Released in March, the aged care royal commission final report contained 148 recommendations aimed at bringing about a “paradigm shift” within the sector.

While the government has pledged nearly half a billion dollars in immediate relief to the sector, to achieve the vision of high-quality aged care, The Australia Institute said the Morrison government needs to use the budget to completely fund the sector.

“Australia is one of the richest countries in the world. There should be no argument over whether we can afford to provide top-quality, respectful care to the elders who helped build our economy and our society,” said Dr Jim Stanford, director of The Australia Institute’s Centre for Future Work and co-author of the report.

In order to support the sector, Dr Stanford proposes either a 1 per cent Medicare-style levy, modest increases to personal income taxes, cancellation of the controversial stage three income tax cuts, reforms to capital gains taxes or closing company tax loopholes.

“The government has access to a whole suite of revenue options to support the ambitious and quick implementation of the royal commission’s recommendations. That effort must start with the 2021–22 Commonwealth budget,” Dr Stanford said.

Bigger, better-trained workforce

One of the key findings from the aged care royal commission was the need for more staff as well as better-trained and paid employees.

Instead of straight staff-to-resident ratios, the royal commission recommends residents receive a minimum of three hours and 20 minutes care per day provided through a mix of nurses and personal care workers.

This is instead of the current model which sees registered nurses primarily confined to offices due to paperwork duties.

The findings also state registered nurses should provide 40 minutes of direct care per nursing home resident per day.

Personal care workers would be better paid under the system, as they would require a minimum Certificate III qualification, meaning they are better trained, as well as basic English language proficiency skills.

United Workers Union aged care director Carolyn Smith said the funding shortfalls explain why aged care workers are left in tears after their shifts.

“The $10 billion annual funding shortfall is leading to horrendous human costs in aged care, with older Australians left unsafe and vulnerable, and workers left physically and emotionally exhausted,” Ms Smith said.

“This report once again underlines that the federal government needs to substantially and effectively address the human toll the aged care crisis is taking on older Australians, their families and aged care workers.”

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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