Aged Care Needs Big Picture Reforms Out of The Royal Commission

Media Release

26 February 2021

The aged care industry is hopeful today’s Royal Commission report into Aged Care Quality and Safety will set the standard of big picture reform required for older Australians to receive the care they deserve and ensure previous failures are not repeated.

Speaking collectively under the Australian Aged Care Collaboration (AACC) banner, providers said the Royal Commission was a once in a lifetime opportunity to achieve the system that older Australians need and deserve, and that workers want to deliver.

AACC representatives Patricia Sparrow and Sean Rooney said more than 20 government aged-care reviews in 20 years had failed to fix a broken system and that the drip feed of ad hoc measures must end.

“There have been some terrible examples in aged care where individuals or services have failed in their duties to provide safe and quality care,” said Mr Rooney.

“As we have said in evidence to the Royal Commission, these failures are unacceptable and we are sorry for the harm they have caused. As a sector we are doing what we can to ensure these failures are not repeated.

“But we cannot do this alone – we need new system settings around policy, outcomes, regulation and resourcing to enable and support providers to deliver the best care possible for our elders.

“Successive federal governments over the past two decades have failed to act on many independent reports highlighting the need for major reform.”

The problem

  • Australia spends $26 billion a year on aged care, $21 billion of which is in the form of government-subsidised care, and the remainder funded by individuals themselves.
  • This is less than half of what comparable countries spend, as a percentage of GDP.
  • 16,000 vulnerable Australians died just  in 2017-18 while waiting for a government-subsidised support package in their own home.
  • An additional 100,000 people are waiting for home support at their approved level – with those in need of the highest-level packages typically waiting at least 12 months.
  • Separately, a further 88,000 places will be required in communal Residential Aged Care over the next 10 years, at a cost of $55 billion.
  • 78,000 extra workers are needed in the next 10 years to deal with the country’s ageing population.
  • 64% of communal residential aged care homes operated at a loss in 2020, almost double the medium-term average of 33%.

Ms Sparrow said that more than 4.1 million Australians, or almost 16% of the population, are currently aged over 65. By 2057, that will rise to 8.8 million, or 22% of the population, and by 2097 it will reach 12.8 million people, or one in four Australians.

“While the sector overwhelmingly is trying to do the right thing, we need to recognize that Australia spends less than half what other comparable countries do on aged care (1.2% of GDP vs OECD average of 2.5%),” Ms Sparrow said. 

“As a result, under-resourced aged care homes were described by Counsel Assisting the Royal Commission as in an ‘impossible situation’, and were struggling to maintain standards and staffing, whilst fighting to keep their doors open.

“Older Australians want and deserve more staff to care for them, ensure they are better paid and better trained – along with better facilities and even better meals.

“We view the Royal Commission report as one of national importance, which we hope will involve a complete redesign of the system.

“Yet the challenges for aged care are only going to grow in coming years, as the large Baby Boomer

generation requires more support.

“After 20 years of missed opportunities, Australia cannot let the release of the final Royal Commission report pass without taking real action.”

Eighty per cent of Australians who receive government-subsidised care do so in their own homes, while the remaining 20 per cent live in communal residential aged care homes, which dominated much of the Royal Commission’s attention.

Types of government-subsidised aged care

Broadly speaking, 1.3 million Australians access government-subsidised aged care services in three different settings:

  1. Own home – for people with low care needs (Commonwealth Home Support Program CHSP) – 840,000 people.
  2. Own home – for people with greater care needs (Home Care Package Program) – 174,000 people.
  3. Communal care homes – where residents generally receive nursing and personal care 24 hours per day, either on a permanent basis or as short-term respite stays (Residential Aged Care Homes) – 244,000 people.