Extra $5B for aged care raises the stakes for May Budget

The push for increased consumer contributions in aged care appears to have received a boost this week with Treasurer Dr Jim Chalmers releasing figures ahead of next month’s Budget showing that aged care spending this year alone is estimated to blow out by $5 billion. As we report here, the Government has released a statement ahead of the 9 May Budget revealing that aged care spending is expected to rise by 23% this financial year to $29.6 billion – not including the expected $1.9 billion bill for the 15% wage rise for aged care workers. This will grow to an expected $35.8 billion by 2025-26 – just three years away. Overall, aged care is now the fifth-largest area of Government expenditure, behind interest on debt, the National Disability Scheme (NDIS), health and national security. The statement – which quotes Dr Chalmers and Aged Care Minister Anika Wells – raises two critical questions: is this $5 billion the extent of the funding increase for aged care this year or will the Budget contain more funding for the sector? Given the Treasurer has been vocal on the trillion dollars of debt facing the Government, the former seems more likely. The second question is: where will this $5 billion be spent? With almost 38,000 people still on the national waiting list for home care, more Home Care Packages (HCPs) would seem to be a given. Delivering on care minutes and growing the aged care workforce should also rate a mention. But underlying both questions is a simple reality – there isn’t enough in the Budget coffers to meet the ballooning costs of delivering aged care in Australia.

“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,” said the Treasurer. “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.”

What the Budget should contain is a path forward for increasing consumer contributions for aged care for those who can afford to pay while supporting those who can’t. The Royal Commission gave the Government the opportunity to put consumer contributions on the table but there wasn’t the impetus from the community and providers to advocate to the politicians for a fairer system. Two years on from their Final Report and with aged care in the spotlight again – if we don’t have a national conversation about consumer contributions now, when will we have another chance?