Care economy must be viable to help quality of life

Like Treasury’s Intergenerational Reports, launched by Peter Costello in 2002, the Albanese government’s National Care and Support Economy Strategy 2023 draft report, released on Sunday, deserves a serious conversation across our society. From childhood to old age, the care economy is central to Australians’ quality of life. It includes the National Disability Insurance Scheme, veterans’ care, early childhood education and care, and aged care, including residential and homecare packages. The nation’s care and support workforce, the report notes, is growing three times faster than other sectors in the national economy “and by 2049-50, the total demand for care and support workers is expected to be double’’. That is due to “enormous projected demand for care and support services’’ across all areas of care.

The government deserves credit for opening a debate on challenges that cannot be ignored until an intractable financial or practical crisis emerges.

The report, produced by the Department of Prime Minister and Cabinet, sets out several important principles. First, “that we meet our nation’s growing and evolving care and support needs without leaving future generations of taxpayers with unmanageable debt’’. Second, that government investment “be both effective and efficient’’, requiring “productivity growth across the care and support economy’’. And third, given that the care and support economy relates to services provided, in most cases, via markets (or quasi-markets), these markets must function well. “As the Australian government is both the regulator (or joint-regulator) and, to a large extent, funder of these services, it needs to be a good steward of care and support markets.’’

Government should resist interventions that direct taxpayer funds to care workers’ wages outside the public sector. Much of the report is geared towards improving the wages, conditions and career development of workers within the sector to overcome “gendered undervaluation of women’s work’’. The 15 per cent, $11.3bn pay rise for 250,000 aged-care workers, funded by taxpayers, must not become a precedent.

The report acknowledges there is “a need to increase productivity to drive real wages growth’’, a point the Albanese government has been slow to focus on in implementing its IR changes. Productivity, the report says, “is about obtaining more, or better, outputs for the same, or fewer, hours of work’’, as demand for quantity of services and higher quality of services increased.

The report poses a pertinent question: “If Australians expect the government to fund a high level of care and support services, would they accept an increase in taxation or a reduction in other government services to pay for this?’’ As in other key areas of social policy, such as healthcare, education and welfare, The Australian believes in self-sufficiency wherever possible, minimising the tax burden, reciprocal responsibility and choice. Families preferring and able to care for their own members, or who can pay for the care they want, should be free to do so, without government further lifting the tax burden. There is also scope for a greater element of user-pays, especially for higher levels of aged care beyond the minimum stipulated by government. To that end, the report lists “fair and reasonable consumer contributions where appropriate’’ as a goal.

It is “critical to note’’, the report says, that over half of NDIS participants (the current total is 573,342 participants) are younger than 18, and more than 15 per cent are younger than seven. “This investment, therefore, has a number of potential long-term benefits, both for the individual and Australia as a society,’’ it suggests. Some of these young people, undoubtedly, are severely disabled and deserve NDIS support. The cost benefits of including children and teenagers with autism diagnoses in the NDIS needs close scrutiny. The report is open for consultation until the end of June.