The Albanese Budget fulfils several election promises for the aged care sector, and funds some additional initiatives from the Royal Commission Recommendation - but will it be enough?
Unfortunately, the Government’s Budget Papers, Media Release, and the Budget ‘at a glance’ documents reference slightly varying degrees of funding which have been allocated (between $3B and $3.9B, depending on which document you read). It will also take a fair bit of effort to distinguish between new and previously announced funding.
Commitment to the Fair Work Commission’s Decision
Perhaps, the most significant funding commitment in this budget was announced two months ago, when the Government released its submission to the Fair Work Commission (FWC). The Government supported a rise to the minimum wage (albeit without guiding the percentage increase) and indicated that it would be fully funded.
The sector breathed a collective sigh of relief. However, the impact of the FWC’s decision on the sector remains uncertain. We are particularly interested in the scenario where the FWC does not recommend the full 25% increase that is being sought and the impact that this will have on providers and staff expectations. Recent Treasury estimates suggested that a 25% increase in the minimum wage would equate to an increase in the workforce of 5 – 10%.
In this budget, the Government has used a ‘contingency reserve’ to provision funding for an increase. It is not possible to determine the amount which has been provisioned pending the FWC’s decision which is expected in a few months.
Confirmation of Anthony Albanese’s $2.5B additional funding promise
The Government has fulfilled a key election promise which was made while in Opposition, immediately prior to the Federal Election, an additional $2.5B to fund the following:
- 200 care minutes (40 nursing minutes) from 1 October 2023
- 215 care minutes (44 nursing minutes) from 1 October 2024
- The requirement for all aged care homes to have a registered nurse onsite 24/7 from 1 July 2023.
Among other things, this will increase the demand for registered nurses further.
A new national registration scheme for personal care workers
Funding of $3.6M has been set aside for a new national registration scheme for personal care workers and will include a code of conduct, ongoing training, and English proficiency. Providers will also be required to preference direct employment.
Registration schemes should be dealt with carefully in a market with significant workforce shortages. The Aged Care sector may benefit from lessons learnt when qualification requirements were introduced to the Early Childhood Education and Care sector approximately a decade ago. Transition periods are likely to be very important. In addition to likely improvements to the quality of service, the sector has the potential to benefit significantly from the workforce data that such a scheme would provide.
Having regard to our experience with working with regulatory agencies in other professions, the level of funding allocated to this item may reduce the scope of the scheme during this initial phase.
Tangible investment in IT to ‘reduce administrative burden’ for providers
A consequence of several Aged Care Royal Commission recommendations was the increased administrative burden imposed on providers. The Government has now allocated $312.6M to modernise ICT to assist providers in interacting with the Government’s aged care systems and to sustain the existing My Aged Care system.
BDO was engaged by the Aged Care Royal Commission in 2020 to evaluate the profitability and viability of the sector, and a key point we noted in our report was just how challenging it was for us to collate all the available data from various systems for analysis. BDO is pleased to see this point being reflected in a Royal Commission recommendation, and to see it being followed up with funding.
Additional support for disadvantaged communities
Funding of $26.1M has been allocated for direct investment to individual homes to better support older First Nations people, those from diverse communities and those living in regional areas. A further $68.5M has been allocated to expand the department’s local presence to help improve regional aged care services, including in eight new regional locations (through the Strengthening Regional Stewardship measure).
Changes to Home Care
The Government has increased its focus on ensuring that funding spent on direct care is maximised by capping home care administration and management fees and abolishing exit fees for consumers. This follows recent newly published data on what categories of expenditure home care providers spend their funding on.
Funding of $23.1M has been allocated to progress home care reforms, including additional consultation, a trial of a new assessment tool, and the establishment of a Service List Advisory Body. The Commonwealth Home Support Programme will be extended to the support at home program commencement (30 June 2024).
Consumer protections and complaints
Almost $50M has been allocated towards additional consumer protection measures, including the appointment of:
- A dedicated Aged Care Complaints Commissioner to address individual complaints ($9.9M)
- A new independent Inspector-General of Aged Care to target systemic issues ($38.7M).
It will be interesting to see whether there will be any relationship between the Aged Care Complaints Commissioner and the public star rating review system - i.e. whether low ratings will be treated as complaints. In addition, it may be worth investigating whether the Complaints Commissioner can be an avenue for providers, under certain circumstances, to appeal ratings given to them by consumers.
Responding to the Royal Commission’s discovery about food in some aged care homes
Funding of $5M has been provided to the Maggie Beer Foundation funded to educate and train residential aged care staff to meet new nutritional standards.
The poor quality and/or lack of food in some aged care homes was a sad finding from the Royal Commission and has led to new standards being set. We are hopeful that the education and training services enabled by this funding will be accessible, engaging, and effective across the entire sector.