Securing Australia's future The additional funding for aged care is welcomed. But is it just the tip of the iceberg as to what's needed?
In 2022-2023, spending on aged care is estimated to be $29.8 billion. This is in response to the Royal Commission into Aged Care Quality and Safety which handed down its final recommendations in March 2021 – just over a year ago.
The Government’s aims are for this funding are to contribute to a more accessible and sustainable needs-based system, to support older Australians to stay in their homes for longer, reform the residential aged care sector, and to grow the size and skills of the aged care workforce.
Based on the five pillars from the recommendations from the Royal Commission, the Budget covers each of the following areas.
Other key initiatives noted:
This Budget announcement falls short of additional funding called for by the Aged Care Royal Commission, the industry and other forecasters who believe the funding required is closer to $50 billion over the same period. With only a further $468.3 million in this Budget, it’s just the tip of the iceberg as to what’s needed.
The funding for additional Home Care Packages or extra hours of care required in residential care is welcome. However Mercer believes this will make minimal impact on older Australians if we continue to face shortages of skilled, quality, and empathetic workforce needed to meet this increased demand.
In light of this Mercer welcomes the funding for an additional 34,000 training places and 7000 new personal care worker so long as these places can be filled. The $800 bonus to aged care workers is trumped by the fact that a significant wage review and increase is required to attract more people to the industry.
Many migrant and older workers are currently holding up a very fragile system without a real workforce strategy in place. Workforce shortages were identified some 20 years ago and continues to an opportunity missed by the Government.
The workforce issues also mean that smaller providers will find it more difficult to compete with the larger providers for staffing, compliance and maintaining quality care. The implication of this is that the number of providers may shrink creating less competition and possibly higher costs for individuals and their families.
The Government has still not addressed the ‘unspoken’ issues of greater private contribution required from individuals and their families who can afford to contribute to their ageing care and living needs. The Government is wary of being perceived as raising taxes ahead of an election even though the Aged Care Royal Commission recommended that the issue of private contributions be addressed.
Implications for employers
Implications for individuals (Senior Australians)
The purpose of superannuation is to provide an income for Australians in retirement. Yet, as the recent Retirement Income Review found, there has been insufficient attention put on helping people to optimise their retirement income through the efficient use of their savings.
For this reason, Mercer wanted to turn this problem on its head and not ask, how much superannuation do you need in retirement, but instead: how can superannuation be used to improve happiness in retirement for all Australians?
Dr David Knox and Will Burkitt share their insights:
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