Ageing Australia says planned aged care developments are already being shelved after a 2.55% funding increase fell well short of rising wage and operating costs.
It’s estimated that already 2000 aged care beds are being shelved or are at risk thanks to the government’s decision last week to increase the main residential aged care price by just 2.55% in a year when award wages have risen 4.75%.
Dozens of aged care providers had reached out to Ageing Australia since the decision was announced on Wednesday, saying their planned new developments were no longer viable.
“It’s gobsmacking,” Ageing Australia CEO Tom Symondson said on ABC Radio this morning.
“We’ve got over 3000 people in hospital beds around the country… waiting because they cannot get hospital beds, because they cannot get residential care beds, and we can only build beds if we’re not losing money hand over fist.
“So, to give us, in real terms, a cut in the funding that runs those services, I can’t get my head around it,” he said.
Last week, it was announced that from 1 October, the AN-ACC price will be $303.19 per resident. This was an increase of just 2.55% from the current price of $295.64 however, this compared to pay rises of 4.75% for aged care staff and inflation of 3.5%.
In addition, the hotelling supplement, which helped to fund things like food, laundry, and cleaning, would remain frozen at $22.15 pending a review, despite cost increases for those things far outpacing CPI over the past 12 months.
“Far from encouraging new beds, this decision is likely to see national bed numbers decline, not to mention it will put at risk the significant improvements in care and resident satisfaction we have seen over the past five years,” Mr Symondson said.
Some examples provided by Ageing Australia included:
- NSW provider, Whiddon, would not be able to go ahead with a planned 100- to 160-bed Residential Aged Care Home because the changes made the build unviable.
- Nationwide operator Regis was shelving its 99-bed development at Belrose, close to Sydney’s Northern Beaches Hospital.
- Abound in Victoria had planned an 80-bed home in Berwick, but the financial position no longer supported proceeding, despite strong demand.
“These examples are just the tip of the iceberg of the many stories we’ve already heard, but they clearly highlight the very real consequences of a decision like this,” said Mr Symondson.
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He said that the residential care industry was no longer sustainable.
“We’ve been unsustainable for years. The point of the new reforms that came in last November was to make us sustainable, then make us investable, so people would actually spend money to build more beds,” he said.
Mr Symondson flagged that not only was the residential care market struggling, but the home care market was starting to be impacted too.
“For the first time ever in the history of home care, home care providers went negative in terms of their financial outcomes at the end of March. They went to losing 50 cents a day per person.
“In the past, home care providers that also provide residential care have been able to use the money they make in home care to prop up residential care. Now they can’t even do that.
“I think we’re going to see a fairly rapid decline if the government doesn’t do something positive,” he said.