Government’s $4.8 billion commitment to aged care deemed insufficient

Apr 19, 2023
Aged care is expected to drive up costs by 23 per cent and become the fifth-largest area of government spending. Source: Getty Images.

Industry groups have warned the government’s recent announcement of a $4.8 billion dollar commitment to the nation’s ailing aged care sector will not be enough to keep facilities open and operating.

As aged care facilities continue to close their doors across the country, the Federal Government announced they will funnel $4.8 billion into the sector in an effort to “restore dignity” to aged care, according to Aged Care Minister Anika Wells.

“However, properly funding our aged care sector comes at a price – with costs to increase in the budget by 23 per cent in the 2022-2023 financial year,” Wells told

“Aged care has been plagued by a decade of inadequate funding which, in addition to the impact of the pandemic, has led to compounded cost pressures.”

Despite numerous financial pressures on the budget, Treasurer Jim Chalmers said “the Albanese government is ambitious for aged care and determined to reform the sector for long term success and sustainability.”

“Whether it’s the interest cost on a trillion dollars of Liberal debt, the NDIS, aged care, health care or the rising cost of national security, the budget is under pressure from every angle,” he said.

“Within the considerable constraints we’re facing on the budget right now, we’ll do what we can to help Australians and we’ll do it in a targeted, methodical, responsible and affordable way.”

Source: Getty Images.

As our population ages and the sector struggles to attract and maintain staff, aged care is expected to drive up costs by 23 per cent and become the fifth-largest area of government spending.

Insights from the Q1 2022-23 Department of Health and Aged Care Quarterly Financial Snapshot, and the most recent Aged Care Sector Survey Report by StewartBrown also show that approximately 70 per cent of providers are expected to incur a loss of $28 per resident per day.

It’s figures such as these that have caused concern among those in the aged care industry that the recent funding announcement will simply not be enough

“The aged care sector is facing enormous financial challenges and workforce shortages, at the same time that it is racing to implement the once-in-a-generation reforms,” an Aged and Community Care Providers Association spokesperson told 7News.

Although Bupa, one of Australia’s major aged care providers, appreciates the federal government’s pledge to enhance the workforce, it cautioned that despite substantial investment, it would take years to resolve current staff shortages.

“As a sector, we continue to experience severe workforce pressures, especially in regional Australia,” a Bupa spokesperson told The Guardian.

“Increasingly, this means many older Australians may not be able to access residential care when they need it.”

The current heated discussion comes in the wake of the closure of several residential aged care facilities in Sydney, which left hundreds of elderly residents without a place to call home.

On Thursday, April 13, Wesley Mission announced the closure of their Sylvania, Carlingford and Narrabeen aged care facilities, with staff shortages being blamed for the decision.

Wesley has pledged to relocate all 199 residents prior to the closure of the three centers at the end of May and has appointed MyCarePath to support residents in choosing a new home.

According to government regulations, residents are not obligated to vacate until suitable accommodations have been secured.

Moreover, around 249 staff members will be reassigned to alternative roles either within the organisation or with external providers.

While announcing the closures, Wesley CEO and Superintendent, Rev Stu Cameron said, “the Aged Care sector is experiencing challenges to workforce and flow-on impacts from the national reforms to Aged Care.”

“Wesley Mission supports these once-in-a-generation reforms, improving quality for all care users,” Cameron said.

“It is, however, a challenging environment to be a smaller provider. With just three aged care locations, our offering in this area is small compared to the large and diverse range of community services we provide around NSW and across Australia.

“At this stage, we anticipate closing our centres at the end of May 2023, and before then, we will be doing all we can to support residents in choosing a new home that meets their needs. We will also be supporting affected staff to find a new role, or with assistance to find a role at a different provider.

“The strength of our aged care services has always been the dedicated partnership of residents, families, staff and partners to provide quality care – we’re grateful for everyone who has invested in these communities.

“Wesley Mission’s support for older people in NSW continues, focusing on providing in-home care and retirement living to help people stay in their homes for longer.”

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