Aged care indexation misses the mark

Aged and Community Services Australia (ACSA) is concerned about the Government’s 1.9% indexation of funding for aged care.

ACSA CEO Patrick McClure, AO said aged care providers question how the Government could justify a figure which fails to address rising costs in the sector.

“Older people living in their homes and those in residential aged care bear the brunt of funding shortfalls which directly impact on services,” he said.

“With no additional funding for aged care in this year’s Federal Budget, 1.9% indexation compounds the problem.”

The Consumer Price Index (CPI) rose 3.3% in the past 12 months. In the March quarter alone fuel costs increased by 8.8%, vegetables by 16% and pharmaceuticals by 12.5%. The minimum wage will rise by $15.51 a week from July 1.

Mr McClure said the rate of indexation was one factor among many identified by the Productivity Commission (PC) as a weakness indicating the need for fundamental reform.

“Real reform is at hand now the PC’s final report is with the Government. But the means for aged care providers to maintain and bolster services remain elusive,” he said.

“The Minister for Ageing has stated that developing fair and sustainable funding arrangements for aged care may be one of the hardest achievements for his Government.

“It will be that much more difficult if there is no action to sustain the industry in the short term.

“We again call on the Government to restore the 1.75% subsidy for residential care services and extend it to community care pending a cost of care study proposed by the PC.”

Media contact: Chris Hornsey 0419 513 432 chornsey@agedcare.org.au