Scott Morrison’s $1bn boost for aged care in mid-year economic and fiscal outlook

An $850m home-care package will be the major spending item in this week’s mid-year economic and fiscal outlook.

Scott Morrison visits a hydraulics company in Devonport, Tasmania, on Tuesday. Picture: Adam Taylor

Scott Morrison will inject an ­additional $1bn into the aged-care sector, supporting 10,000 new home care packages and bolstering nursing facilities hit by the COVID-19 pandemic.

The major spending item in this week’s mid-year economic and fiscal outlook comes ahead of the Royal Commission into Aged Care Quality and Safety handing down its final report in February and as overall spending on aged care is projected exceed $27bn in 2023-24.

The $850m home care package increases the overall number of places funded since the royal commission handed down its ­interim report last year to almost 50,000, at a cost of $3.3bn. With the number of Australians aged over 70 having increased by 28 per cent since 2012, home care packages are estimated to have spiked by more than 200 per cent.

Josh Frydenberg’s mid-year budget update is focused on ­recasting economic growth forecasts off the back of a faster-than-anticipated recovery and comes after the Reserve Bank on Tuesday revealed it had upgraded growth expectations in the last three months of the year. The central bank is now predicting unemployment to peak below its November forecast of 8 per cent.

Ahead of Thursday’s release of the budget update, figures obtained by The Australian show the number of JobSeeker and JobKeeper recipients has continued falling as states and territories have neutralised the spread of the coronavirus and lifted restrictions.

JobSeeker recipients (including those on Youth Allowance) have fallen from a May peak of 1,635,286 to 1,490,000 and JobKeeper recipients fell from a peak of 3.6 million in July-August, to 1.5 million, as of November 26.

The Prime Minister, who has announced 10,000 new home care packages in addition to ­budget commitments at the past three mid-year economic updates, said the health and wellbeing of older Australians was an “absolute priority”.

“By providing more support to people at home, we are ensuring that Australians, as they age, have greater choices and their families have greater choices,” Mr Morrison said. “We will continue to address the many challenges there are in aged care, not only by boosting funding but also providing better access to health services to improve physical and mental wellbeing for older Australians.”

 

Health Minister Greg Hunt said the new packages, in addition to a $1.6bn investment for more than 23,000 packages announced in the October budget, would increase the number of Australians receiving in-home care support to 195,600 by June 30 next year.

Other funding commitments include an additional $57.8m for the National Partnership on COVID-19 aged care response and $63.3m to support increased access to health services, mental health support and allied health group services for residents living in nursing homes impacted by coronavirus outbreaks.

Despite a 10-week turnaround from the delayed October 6 budget, The Australian understands Treasury was keen to return to a “normal” budget planning schedule to allow for a longer lead-in to next year’s May budget and incorporate better than expected economic recovery projections.

Economists at CBA and ANZ predict the speedier economic recovery will help trim about $10bn from the deficit in 2020-21, ­putting it at just over $200bn. Treasury is likely to continue to take a conservative stance on the price of iron ore, which has hit seven-year highs in recent weeks on surging Chinese demand.

The RBA on Tuesday distributed the minutes of its December 1 board meeting, which was held before the September quarter national accounts were released. They show the board upgraded expectations for growth in the December quarter.

The central bank said the unemployment rate was now predicted to peak below its November forecast of 8 per cent, “as employment had also recovered faster than anticipated”.

RBA board members “noted that the recovery had established reasonable momentum, aided by the lifting of restrictions in Victoria” but warned that “the recovery was still expected to be uneven and protracted, with inflation remaining low”.

The central bank said it did not expect to increase the cash rate for at least three years, stressing that “substantial policy support would therefore be required for a considerable period”.

Australian Bureau of Statistics payroll data released on Tuesday revealed employers had taken on an additional 100,000 workers in the final two weeks of November. NSW led the national increase in payroll jobs with a 0.6 per cent gain, while Victoria rose by 0.4 per cent.

Labour force statistics for ­November, which will be released on Thursday, are expected to show a 40,000 lift in employment in the month, leaving the unemployment rate steady at 7 per cent.

ABS head of labour statistics Bjorn Jarvis said the country had now regained three in four jobs lost over the month to mid-April, when national restrictions shuttered entire industries and sparked massive job losses.

As Australians take advantage of border restrictions being removed, Jetstar said it would operate more domestic flights in February and March than any previous year, as demand for the airline’s discount tickets exceeded pre-COVID levels.

Retailers have also been buoyed by surveys showing surging levels of consumer confidence, with the ANZ-Roy Morgan weekly sentiment gauge climbing to a new high in 2020 over the weekend.