Cost of aged care rises to create budget blowout
The cost of aged care will skyrocket in this year’s budget as the sector grows to the fifth largest area of Australian government expenditure.
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The cost of providing care for the oldest and most vulnerable Australians has skyrocketed in this year’s budget, with the amount taxpayers will pay to maintain the sector to rise further in the years to come.
The 2023 budget on May 9 will reveal aged care costs to have grown to make the sector the fifth-largest area of federal government expenditure.
The costs will rise to an estimated $29.6bn from $24.8bn in 2022, a leap of 23 per cent.
Rising costs have been attributed to Australia’s ageing population, with the number of aged care recipients growing 3.5 per cent from 2020-21 to 2021-22 to reach 1.5 million.
That figure will shoot up yet again, estimated to reach $35.8bn by 2025-26.
The cost will increase again beyond 2026 as the number of people in Australia over the age of 65 increases by almost two per cent by 2032.
The Royal Commission into Aged Care Quality and Safety undertaken throughout 2019 found “systemic failures” and that “substandard care and abuse pervades the Australian aged care system”.
The decision to boost funding comes as the Albanese government attempts to “restore dignity” to the sector after years of underfunding, according to Aged Care Minister Anika Wells.
“However, properly funding our aged care sector comes at a price – with costs to increase in the budget by 23 per cent in the 2022-2023 financial year,” she said.
“Aged care has been plagued by a decade of inadequate funding which, in addition to the impact of the pandemic, has led to compounded cost pressures.”
Treasurer Jim Chalmers has warned Australians to expect a budget which has been stifled by rising costs.
“Whether it’s the interest cost on a trillion dollars of Liberal debt, the NDIS, aged care, health care or the rising cost of national security, the budget is under pressure from every angle,” he said.
“Within the considerable constraints we’re facing on the budget right now, we’ll do what we can to help Australians and we’ll do it in a targeted, methodical, responsible and affordable way.
“The Albanese government is ambitious for aged care and determined to reform the sector for long term success and sustainability.”
His concession that the sector was placing serious pressure on the budget comes as a number of aged care homes across the country shut their doors due to not being able to meet new government requirements.
Three facilities in Sydney and three in Perth will close before July 1 because they will not be able to meet the requirement to have a registered nurse on the premises 24 hours a day.
On Monday, Prime Minister Anthony Albanese said he made “no apologies for being ambitious” in aged care.
Originally published as Cost of aged care rises to create budget blowout
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