Aged care no excuse for tax snatch

Something will need to give. As baby boomers head into old age (more than 4.2 million Australians, or 16 per cent of the population, are currently aged 65 or over), more than half of the nation’s residential aged-care providers are operating at a loss. Most older Australians prefer to and do stay in their own homes for as long as possible, assisted by home care packages. But with the sheer numbers coming through, however, as more Australians live to 90 and beyond, with increasing need for support, places in good nursing homes will be in greater demand.

Boomers are unlikely to accept inferior quality care and accommodation. Nor should they. Beyond a good standard of basic care and nursing, it is not unreasonable, The Australian believes, that nursing home residents have the option to self-fund “extras’’ – better-quality food, entertainment, computer access, more frequent laundry services, and other lifestyle expenses.

The challenge of how to pay for better-quality aged care was the subject of a meeting in June involving providers, consumers, unions representing aged-care staff and experts in the sector. As social affairs editor Stephen Lunn reported on Thursday, the meeting developed a range of funding options, which have gone to Aged Care Minister Anika Wells to consider. “Aged care in Australia cannot continue to muddle along with Band-Aid solutions while the system crumbles,’’ the issues paper said. “It shouldn’t be about simply propping up aged care. It should be about improving the lives of older Australians. They deserve better.” It sounds good in theory. And it is important, in light of the realities faced by our ageing nation, set out in Treasury’s intergenerational reports, for government and the sector to look ahead.

Two of the main options among the proposals, however, are untenable and unacceptable, especially the idea that “a proportion of superannuation guarantee contributions is ring-fenced to pay for aged-care costs”. The paper’s argument that people are dying with large amounts of unused savings, in super or the family home, sacrificing the quality of their aged care to pass on an inheritance won’t wash. People who have made their way don’t need the nanny state dictating how they spend their money. It is up to them, not the state. Not all older folk need nursing homes, so their super would be “ring-fenced” for no benefit.

Nor should government use aged care as an excuse for a tax grab through a Medicare-style aged-care levy, or the abhorrent idea of a new social insurance scheme, as funding options. NDIS spending, for example, is soaring, mainly due to eligibility anomalies. Some social security spending is too high and much of the public sector, federal and state, is too big. Boosting economic growth and revising spending to prioritise essentials would be more challenging than raising taxes, but better serve the national interest.