Aged care backflip to cost taxpayers $900m

The Aged Care Act was due to commence on July 1 after passing parliament with the Coalition’s support last year, but will now be pushed back to November.

Health Minister Mark Butler. Picture: NewsWire / Martin Ollman

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Labor’s four-month aged care delay will cost taxpayers $900m and is being been described by the Coalition as “an embarrassing backflip” that followed intense upheaval in a sector warning for months the government’s reform timeline was impossible.

The Aged Care Act was due to commence on July 1 after passing parliament with the Coalition’s support last year, but will now be pushed back to November.

While providers had been calling for the reforms – which will create a new support-at-home program and enshrine a statement of rights for older people – to be delayed by six to 12 months, the short reprieve agreed to by government on Wednesday was still met with marked relief from peak bodies.

Ageing Australia said the decision was the result of “months of intense discussions and calls for practical timelines for the sector”.

“We know that rushed reforms would put levels of care at risk for older people,” Ageing Australia chief executive Tom Symondson said. “We fully support the new rights-based Aged Care Act but the simple truth is we’re not ready to introduce all the sweeping reforms by July 1. Providers have been working around the clock to ensure a smooth transition, but we just haven’t received all the information we need in order to proceed.”

While agreeing to support the passage of the act, the Coalition in the last term of parliament sought to implement a 12-month transition period for the reforms, but was voted down by Labor.

Opposition health and aged care spokeswoman Anne Ruston. Picture: NewsWire / Martin Ollman

“The government was warned. We put forward a responsible, measured amendment to ensure that their reforms could be rolled out safely and effectively, and Labor opposed it,” opposition health and aged care spokeswoman Anne Ruston said.

“The aged care sector has been crying out that the July 1 deadline was not deliverable without causing serious negative consequences. Why has it taken the government until five minutes to midnight to alleviate the stress and uncertainty they inflicted?”

Senator Ruston also pointed to the ballooning home care wait list, which had now “spiralled out of control” to the point more than 83,000 people were now waiting for packages.

Health Minister Mark Butler said Labor had made “no secret” of the fact that the proposed changes represented incredibly ambitious reforms.

“This brief ­deferral allows providers to train their staff and have conversations with their clients, get their IT systems ready and prepare operations for an orderly transition,” he said.

New Aged Care Minister Sam Rae said he had spent his first weeks in the portfolio listening to the concerns of providers and elderly Australians. “This is about ensuring the new Aged Care Act and Support at Home is ready for older Australians and their families,” he said.

The decision to delay the commencement of the act comes after the government this week also changed controversial liquidity rules for retirement living providers after outcry over reforms that peak bodies warned would risk the financial viability of organisations forced to put aside millions of dollars in cash reserves.