Aged care levy considered to improve quality of the sector

Jun 12, 2023
While the Aged Care Minister didn't commit to the levy she did explain that the task force has a "genuine duty" to consider a levy and a user pay system. Source: Getty Images.

In a bid to address years of negligence in the aged care sector, Minister for Aged Care Anika Wells has hinted that a levy is being considered to fund much need improvements for the sector.

Wells suggested a levy was on the table during an appearance on ABC’s Insiders in which she stressed the need for an “honest, responsible and mature discussion about what aged care is going to look like in this country”.

“I would say we’re still not advocating any particular proposal,” she said.

“What we are saying is that we are opening up a taskforce, like you said, short, sharp, to deliberate for six months on how to move forward.”

While Wells didn’t commit to the levy she did explain that the task force has a “genuine duty” to consider a levy and a user pay system.

“I think we need a system that people feel like they’ve got a choice about where they go and if they have the means to pay for it, they can do so,” she said.

“[People] want more options, they are prepared to pay for higher quality care, but they can’t find it, so my job is to create the policy settings to allow those things to be built so people can find it.

“This is just one policy area that has been allowed to drift as ‘too hard’ for decades and decades.”

While the opposition labelled the suggestion of a levy as “lazy”, a 2021 study from the Australian National University found that more than eight-in-10 Australians support a tax-based levy to improve aged care.

At the time, the study of more than 3,200 Australians’ attitudes to aged care found less than one-in-three Australians had confidence in the aged care system.

Study co-author Professor Nicholas Biddle said the findings paint “a very timely, and sadly very bleak, picture of the state of aged care according to Australians and our overall faith in a system that has come under close scrutiny in recent years.”

“We found that across Australia, just 1.8 per cent of people had a ‘great deal’ of confidence in the aged care system and Around 31.1 per cent of said they had ‘quite a lot’ of confidence,” Biddle said.

“In contrast, more than half, 55.2 per cent, said they did not have ‘very much confidence’ and 12 per cent said they had ‘no confidence at all’.”

Wells announced the formation of the aged care task force while addressing the National Press Club on Wednesday, June 7.

“Today I am releasing the Terms of Reference and announcing the membership of the Aged Care Taskforce,” she said.

“I will chair this Taskforce that has yet another ambitious task – reporting by the end of the year and advising the Albanese Government on options.

“The Taskforce members have expertise in economics, finance, public policy, ageing and aged care, First Nations, consumer advocacy and provider advocacy.

“There is a strong focus on the consumer voice and, given this work is intended to support future generations as they move into aged care, the membership also includes a young economist with a strong interest in intergenerational issues and inequality.”

The Aged Care Taskforce will take a look at the current funding structures in aged care and establish a comprehensive system that ensures fairness and equality for all Australians. The task force will build upon the insights provided by the Royal Commission into Aged Care Quality and Safety, focusing specifically on reviewing funding arrangements, which will include:

  • contributions arrangements that will support a sustainable system
  • equity for older people needing aged care now and into the future, and for all Australians contributing to aged care funding through their taxes
  • making innovation the sector default
  • enhancing the elements of the system that Australians value, including putting people using aged care at the centre of the funding arrangements.

“This is about the Government investing in the care that older Australians actually want – and they want to be at home,” Wells added.

“This is about delivering a needs-based arrangement that makes financial sense.

“The Taskforce will help our seismic shifts from provider focused to person focused, and funding focused to care focused.

“This new piece of work is the next chapter after twelve months of triaging an absolute crisis.

“This new piece of work is only possible now the results tell us that what we are doing is working.

“This new piece of work forms part of our capacity to face the future with ambition for aged care.”

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