Federal Budget 2021-22

A path forward for Health & Aged Care, but not without some remaining obstacles

Darrell Price
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Many in the aged care sector are frustrated.

Highlights from the 2021-22 Federal Budget

  • $17.7b over four years to respond to the Royal Commission
  • $13.2b over four years towards the NDIS
  • $2.3b commitment to mental health and suicide prevention
  • $350m to support women’s health and wellbeing
  • $114m to extend telehealth to the end of 2021
  • $80.9m over five years to boost healthcare in regional and remote Australia

The 17.7b aged care in funding is welcome, and will address some of the concerns that have been raised by the sector. The measures include increasing care by 200 minutes prpd, adding 80k home care packages (mindful there are still 100k older Australians in the cue), and providing $10 per resident per day for care home residents to help providers provide the services older Australians need. A welcome addition is 33,000 training places for carers, to supplement the workforce, additional indigenous workers, as well incentives for nurses to keep them in the aged care industry. This will come with sting in the tail with an additional $119m in funding to enhance regulatory oversight, development of a new ACT and infrastructure, to “restore trust” in the industry.


The Royal Commission was meant to provide a clear pathway forward for aged care in Australia; creating a baseline for quality and safe care, but also putting the challenges the sector is facing under the microscope. This includes workforce retention, difficulties accessing funding and the endless array of bureaucracy that diverts attention from the care of residents to paperwork.

The Report delivered by the Royal Commission highlighted issues well known to – and owned by – aged care providers. Many of these issues have been highlighted in our own reports. What we are looking for are solutions to not only the immediate challenges, but the “wicked problems” that lurk beneath and prevent us from having a long-term strategy for the sustainable, accessible and quality care of our ageing Australians.

Yes, we need more people in the aged care profession. But the numbers quoted simply don’t exist. So where do they come from? How do we remunerate them and support their further education so they stay? How do we work with tertiary institutions to create a pipeline of people more prepared for the challenges of dealing with disabilities, cognitive impairments, complex health issues and other special needs? How do you standardise care when every individual receiving care is as unique as their own fingerprints?

How do we deal with a funding shortfall? And I know this is a difficult question to ask as Australia entered into record deficit to stave off recession. However, it is a question that cannot wait with some aged care providers on the brink of collapse and a long waitlist of people who have yet to find a spot in either out of home care or residential care. The Grattan Institute suggests the sector needs an additional $10b each year. Stewart Brown suggests anywhere between $23b and $50b more a year. My own research suggests the additional funds required could be as high as $70b a year.

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These are questions posed in the Royal Commission’s Final Report, but not definitively answered or fully resolved. Disappointingly, Commissioners Pagone and Briggs avoided the opportunity to endorse a funding model that sees those who can afford to pay for their care to do so – thus taking pressure off providers to do more with less.

Funding has to come from someone’s pockets. Ideally many pockets: from State and Federal Government, as well as consumers to ensure the standard we all aspire to. We believe that an aged care model could be developed in a similar vein to our healthcare system, where there are clear safety nets for those that cannot afford to pay, while those that can, do pay. This would allow governments to limit their own expenditure by capping care, daily living and accommodation subsidies, and allow consumers to contribute above these levels on a means tested basis. This would increase funding for providers, and increase the quality of care by increasing competition between providers who will have to enhance services to attract people who can pay.

We appreciate the difficulty in achieving the right balance. Aged care is a critical care mechanism with many moving parts and intersections with other services, including healthcare and the disabilities sector.


There is also a delicate balance that needs to be achieved to enable labour markets, capital markets and consumer markets to function and create opportunities for providers to deliver better care to older Australians. We must find a way of balancing them to ensure older Australians are cared for into the future. This requires both funding and smart policy.

The question is, what does the Government do with a Report that creates milestones and targets to fix immediate challenges, but can’t agree on a defined future for the sector? In the short term, likely the next 12 to 24 months, we anticipate there will be additional funding for providers to properly assess their long-term viability. It’s an unfortunate reality that some providers may no longer be operational in just a few short months. Any exits will need to be managed sympathetically and carefully for both the providers and the people in their care.

In tandem, more research is required into the nuances of aged care provision. An independent advisory board should be convened to assess the priority areas of focus, which may include how we achieve efficiencies between the aged care and health sectors, or how we measure quality of life to better benchmark and provide services. We are at the stage now where we need the nitty-gritty detail.

Finally, and fundamentally, we need a call on how the sector will be funded going forward. The current model simply isn’t achieving the outcomes we expect.

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