TLC Healthcare CEO Lou Pascuzzi angry at Andrews and Albanese governments

Victoria’s largest family-owned aged care provider says it’s facing a $2m power and payroll tax hit in a cost of living blow which will close homes across the industry.

TLC Healthcare CEO Lou Pascuzzi has taken aim at the Andrews government’s payroll tax.

Victoria’s largest family-owned aged care provider has revealed it is facing a $2m hit in power bills and payroll tax, taking an extraordinary swipe at both the Albanese and Andrews governments over policies it says will force other operators to close.

TLC Aged Care, which runs 12 facilities across Melbourne and Geelong, says its electricity bills will double from July 1, costing a whopping $850,000 over 12 months.

In a double whammy, they say they will also be slugged with an extra $1.3m in payroll tax under changes announced in the state budget – just two weeks after the federal government increased funding per aged care resident from $223 to $260.

TLC Healthcare CEO Lou Pascuzzi criticised the Andrews government for so quickly “burying their snout” into federal money meant to cover worker wages and inflation.

The state budget announced a payroll tax that will hit aged care providers. Picture: Aaron Francis

“No sooner were additional aged care funds revealed by the federal government, did the state government bury their snouts into that very funding, by increasing payroll tax rates effective July 1, 2023, which will cost TLC an additional $1.3m in payroll tax per annum,” he said.

Mr Pascuzzi also accused the federal government of misleading voters on power prices after Prime Minister Anthony Albanese promised 97 times before the election that he would cut power bills for families by $275 come 2025.

He said the $850,000 spike came despite some TLC homes having solar panels.

“This significantly reduces the net position of any increase in federal government aged care funding,” he said.

Mr Pascuzzi says the federal government misled voters on power prices.

“The federal government has misled the Australian people with promises of electricity cost reductions/containment.

“Unless funding indexation is related to real cost increases in the future, more aged care providers will have no choice but to exit the market, which will create a significant problem for governments relative to Australia’s ageing population.”

Mr Pascuzzi said some new major projects planned by the company would have to be delayed.

The nation's peak body for aged care providers has urged Daniel Andrews to reconsider slapping extra payroll tax on facilities, saying they relieve pressure on the state’s strained healthcare system.

Aged & Community Care Providers Association CEO Tom Symondson said “any extra costs would be another blow to the sector”, which was already facing “unsustainable” losses.

“We urge the state government to reconsider this decision, in the interest of older people and the community in general,” Mr Symondson said.

But a state government spokesman said the levy to pay down Covid debt was “temporary, targeted and above all, responsible”.

He said existing payroll tax exemptions for hospitals and charities would apply, with non-profit aged care facilities typically exempt.

For-profit providers make up about just over a third of all residential facilities nationwide.

Accountants StewartBrown in April recommended a payroll tax supplement be considered as part of desperately needed financial reforms.

On average, payroll tax for caring staff cost 13 cents per bed a day, with a further 4 cents spent on payroll tax for administration staff during the six months to December 2022.

But this is set to rise under the state government move to pay down debt.

Originally published as TLC Healthcare CEO Lou Pascuzzi angry at Andrews and Albanese governments