Tax lift of 1pc the cure for aged care’s ills

Bringing aged care up to scratch would require every Australian to pay an extra one percentage point of income tax, a Deloitte Access Economics report finds.

Minister for Aged Care and Senior Australians Richard Colbeck during a press conference at Parliament House in Canberra. Picture: NCA NewsWire / Gary Ramage

Bringing aged care up to scratch would require every Australian to pay an extra one percentage point of income tax, a Deloitte Access Economics report finds.

The funding would deliver four-star staffing levels in nursing homes, uncap the provision of care provided at home, improve access to GPs, dentistry and rehab, and give respite for family members providing care to the elderly.

The Deloitte modelling, commissioned by the aged-care royal commission, finds 30,000 new full-time jobs would be needed in the sector in the next decade just to provide the necessary quality improvements, alongside the 50,000 extra workers needed to meet the growing cohort of older Australians in care.

This would include almost a doubling of registered nurses.

The modelling proposes wages for professions in the aged-care sector rising to levels equivalent to other healthcare sectors to attract the required workers. This includes 5.5 per cent a year wage increases for nursing and other skilled aged-care jobs, more than double economy-wide averages.

And the skilled migration program for workers with specific aged-care skills would need to be substantially increased.

Benetas’ chief executive Sandra Hills.

The study comes as the commission begins to hone its plans for a redesign of the aged-care system ahead of its final report due in February.

Understanding the cost of delivery of high quality care to the broader taxpaying public is a critical element. The commission will next week examine financing of the aged-care system.

The Deloitte modelling, designed to inform that sitting, finds a one-percentage-point increase in income tax, or a 0.89-percentage-point increase in the Medicare levy, will deliver four-star standard care in the sector.

The proposal fits comfortably inside what Australians have indicated they are willing to pay to ensure all older people can access high-quality aged care.

A separate study by Flinders University received by the commission concluded Australians were prepared to pay 3.1 percentage points more income tax for this assurance.

The Deloitte modelling is founded on the clear preferences of older Australians to have aged care delivered into their own home rather than move into residential aged care.

Australia has a higher proportion of people over the age of 80 in nursing homes (19 per cent) than any other developed country.

The commission is considering recommending a Netherlands-style approach where the funding model prioritises in-home care over residential aged care, reflecting people’s preference to stay in their own homes as they age.

“The shift away from resource-intensive residential care towards home care packages tempers the overall level of funding required for this package of reforms,” the report says.

Facilitating this preference for home care does not have to wait for the government’s response to the royal commission, not-for-profit home care provider Benetas chief executive Sandra Hills said.

“More than 100,000 older Australians who have been formally assessed and approved for home care packages are still waiting to be granted access to one of the­ ­finite packages currently made available,” Ms Hills said.

“That is thousands of older people who will be waiting for up to two years to receive the essential services and care they need to live and age safely at home.”