“Political Stunt”: how the Budget cash splash means profit to providers over aged care reform

The federal government announced its $17.7 billion aged care budget with bells and whistles. Peak bodies for providers described it as a “big win for older people”. However, it is aged care providers, not older people, who have won. 

The home care sector has been given an extra $6.5 billion over four years to provide an additional 80,000 home care packages. Yet the government has not put in place any accountability measures to stop the rorting of the system. How is it possible that a recipient of a Level 4 home care package worth $52,000 receives on average only 8 hours and 45 minutes of support?

Some unscrupulous home care providers who charge older people exorbitant fees, high hourly rates for support workers and excessive costs for equipment will be celebrating. 

So too residential aged care providers, who will be given $3.2 billion over four years, to be rolled into a new funding model, the Australian National Aged Care Classification (AN-ACC). 

In return for an extra $10 a day per resident, providers simply need to “give an undertaking that they will report (my italics) to government on expenditure on food on a quarterly basis”. Monash University aged care expert Joseph Ibrahim said the extra daily funding would be welcomed but would simply be pocketed by providers.

In their final report, the royal commissioners noted that aged care providers have a long history of not spending extra government money on what they were supposed to. So why did the government give them further billions without tying the money to direct care and food? 

The hard reality of who would benefit from the cash splash for providers came shortly after the Budget as aged care shares on the ASX rallied hard. Estia for example, in which media mogul Kerry Stokes has a stake, rose strongly as Macquarie Equities revised up its profit forecasts (EPS) by 57% to “reflect the incorporation of increased government funding”. Clearly, analysts accept that the rise in funding won’t be passed through to the aged, rather absorbed into corporate profits.

The budget confirmed what many of us already knew. Not only was the Aged Care Royal Commission a political stunt, the government has no intention of holding accountable the multinational providers and corporatised charities that will now be receiving close to $25 billion a year from taxpayers.

A few hours after the budget that announced this massive cash injection into providers’ pockets, the government quietly released its official response to the Royal Commission – The Australian Government Response to the Final Report of the Royal Commission into Aged Care Quality and Safety. 

As many of us advocates argued at the time the royal commission was announced, there was never any need for it. The announcement surprised everyone, including Ken Wyatt, the then aged care minister.  

Numerous inquiries, reviews, consultations, thinktanks and task forces over the previous decade, initiated by both Coalition and Labor governments, had provided heaps of evidence of inadequate personal care, negligence, neglect, abuse and assault. 

Many of these inquiries came to the same conclusion as the royal commission: the lack of well-trained staff is the main reason for neglect, abuse and chemical restraint. The aged care sector needs more staff with more training and they need to be paid a decent salary.

And like all the inquiries that came before it, whose recommendations have been filed in the rubbish bin, many of the Royal Commission’s important recommendations have been ignored. Rather than providing genuine aged care reform, the government has merely done some tinkering. 

Royal Commission recommendations ignored 

Let’s just take a few responses. 

The Royal Commissioners argued: “Staff ratios should be introduced to ensure that there are sufficient nursing and other care workers present at all times (my italics) in residential aged care” (p41, Volume 1). 

The government instead opted to mandate a registered nurse on duty for 16 hours per day, ignoring the fact that residents may have a medical emergency overnight. 

Some claim that mandating the amount of time staff must spend caring for residents is among the aged-care package’s most important commitments. 

From 2023, staff will be required to provide at least 200 minutes of care a day to each resident, including 40 minutes of care delivered by a registered nurse. No information is given on how this time will be measured and enforced. 

After spending $90 million of taxpayers’ money on a royal commission, many of us hoped for fundamental reform, not merely staff spending a few extra minutes with our loved ones.

The commissioners recommended mandatory training in dementia and palliative care, which are the two biggest needs in aged care. Instead, staff are being “encouraged” to undertake training. Not surprisingly, the $49.4 million for palliative and dementia care and $27.3 million to fund 1650 new training places is going directly to private providers rather than public educational bodies such as TAFE.

The commissioners recommended the registration of personal care attendants. Again, the government ignored it, saying that professional regulation under National Registration and Accreditation Scheme “would be disproportionately burdensome for personal care workers and present a significant ongoing cost”.  

So we will continue to see personal care attendants who neglect and abuse older people employed in the sector. Only those with a police record will be banned.

Rather than adopt Commissioner Pagone’s recommendation of an Australian Aged Care Commission that would have been independent of ministerial direction, the government chose to stick with government‐led departmental governance, which is bound to deliver more of the same. 

There is however some good news. The government has agreed to re-write the Aged Care Act. The new Act will be informed by consultation with a new Council of Elders. Rather than pay lip service to the views of older people, the Department of Health must commission organisations with expertise in genuine co-design.

Disappointingly, COTA, the peak body for older people that receives generous funding from the federal government, waxed lyrical about the budget and its response to the royal commission as “the biggest investment in aged care in a generation” and “a serious and meaningful response to the Royal Commission”. The National Ageing Research Institute also welcomed “the investment in aged care reform (my italics)”. 

However, cherry picking recommendations the government is prepared to fund and ignoring the rest is not a meaningful response. It is a political response.

The government’s budget and response to the royal commission is not the “generational change” the Prime Minister and Health Minister promised. By ignoring many of the game-changing recommendations, the government continues to pour money into a dysfunctional system.

At the end of a 2½-year royal commission, most Australians would expect the aged care system to include well-trained and well-paid staff overseen by an independent regulator.  The public also expects transparency and accountability for $25 billion per year in taxpayer funds that will be given to the aged care sector over the next five years.

What Australia has instead received is “no guarantee of mandatory minimum training of workers, a refusal to lift wages, a bolstering of an inept regulator and continuing freedom for providers to spend money as they see fit”. Older people, families, staff and advocates who made submissions to the royal commission must all feel completely let down.

Aged Care fail – and now a Budget bonanza for Home Care freeloaders