Union says taxpayers should pay more for Medicare to foot rising aged care cost

One of Australia’s major unions says taxpayers should cough up more money to foot the rising cost of aged care.

One of the country’s major health unions is calling on taxpayers to cough up more money to help fund Australia’s aged care system, despite the coronavirus shutdown suffocating wage growth.

A report released by the Health Services Union (HSU) urges the federal government to hike the Medicare levy from 2 per cent to 2.65 per cent, arguing the rise in what Australians pay for public healthcare would add nearly 59,000 new workers to the sector.

The increase by 65 basis points paid in the levy would cost taxpayers an estimated $20.4 billion over the next four years.

Health Services Union national president Gerard Hayes. The union is calling for an increased taxpayer contribution to Medicare. Picture: NCA NewsWire/Bianca De Marchi

HSU’s report was commissioned for the royal commission into aged care and says only 42.5 per cent of Australia’s aged care facilities are meeting satisfactory standards — a similar view to opposition leader Anthony Albanese, who said Labor would examine structural changes to the Medicare levy once the commission had delivered its final report.

“We’ll examine the royal commission when it comes out with regard to structural change that’s required,” Mr Albanese said on ABC’s Insiders program.

“It’s very clear that the aged care sector is, in the words of the royal commission, ‘subject to neglect at the moment’.”

Opposition leader Anthony Albanese said the aged care sector is being neglected: NCA NewsWire/Gary Ramage

The push to increase what Australians pay for health care comes as the economy continues to be rocked by the coronavirus pandemic, which has fuelled a rise in unemployment and placed downward pressure on wage growth.

Reserve Bank of Australia governor Philip Lowe said earlier this month to a parliamentary committee that the country’s GDP for the June quarter is expected to contract by 7 per cent.

He also noted wage growth is expected to remain low, averaging growth of 1.5 per cent over the next 2 years.

Reserve Bank of Australia governor Philip Lowe said on August 14 to a parliamentary committee that Australia’s GDP for the June quarter is expected to contract by 7 per cent. Picture: Joel Carrett/AAP

Liberal senator and aged care minister Richard Colbeck says the government will make a decision once the royal commission publishes its final report, expected in February.

“The Morrison Government has invested record levels of funding into aged care, up to a planned $25.4 billion in 2022-23,” he said.

“Labor lost the last election with over $387 billion of additional taxes but not 1 cent for additional funding for home care packages and mainstream residential aged care.”

Liberal senator and aged care minister Richard Colbeck says the government will make a decision once the royal commission publishes its final report. Picture: NCA NewsWire/Gary Ramage

The HSU said the increase would enable aged care residents to receive an additional 89 minutes in care per day.

HSU national president Gerard Hayes said aged care had been “running on the smell of an oily rag”, with the virus further damaging a struggling sector.

“We must now build the aged care system our elderly deserve,” he said.

“Care homes desperately need more staff with greater training and higher pay.

“For too long the system has relied on the goodwill of a highly casualised and underpaid female workforce that often retired into poverty.”

The report also forecasts Australia’s ageing population will require a dedicated workforce of 200,000 employees over the next 2 decades.

HSU’s report was in conjunction with Equity Economics.