New aged care Business Improvement Fund

LASA has welcomed the Federal Government’s new $50 million Business Improvement Fund but says the residential care sector needs an additional $1.3 billion in support over the next 18 months.

 

“This is a positive step, as long as it is the precursor for a major increase in operational funding for the quality care of thousands of older Australians,” said Leading Age Services Australia (LASA) CEO Sean Rooney.

 

“Hopefully, this is a sign the Government is listening because recent independent research shows increasing and ongoing financial pressure is impacting the ability of residential care providers in both city and country areas to effectively meet the needs of those they care for.

 

“Almost every week, LASA hears about another residential care home struggling to make ends meet. This raises the risk of incidents of missed care and is creating an uncertain future for many services, given we are already seeing services closing in some communities.

 

“We also welcome the weighting of the new fund towards regional and bushfire affected areas where the impacts on communities are the highest because many country homes are doing it tough.”

 

The fund is available to eligible residential care operators and aims to support better business planning, including facilitating the transfer of businesses.

 

“Hopefully this is a step towards a national transition program that will enable and support a structural adjustment approach to sector development that we have been calling for over the past six months,” Mr Rooney said.

 

“Not only do homes require a major cash injection for care, there needs to be support for business adjustment to ensure continuity of care.”

 

LASA’s lobbying for extra operational funding is echoed in a report just released by the Royal Commission into Aged Care Quality and Safety, highlighting that Australia spends about 1.2 per cent of GDP on aged care, against the OECD average of around 1.5 per cent.

 

The latest survey by accountants StewartBrown warned that 51 per cent of aged care facilities recorded an operating loss in the September quarter, saying “financial concerns cannot be overstated”.

 

“Comparable systems to Australia spend around two per cent of GDP on aged care,” Mr Rooney said.

 

“If we want a world-class aged care system then we need to have world-class funding to realise this outcome for older Australians.”

 

Business Improvement Fund guidelines and a fact sheet are available on the Department of Health website https://www.health.gov.au/initiatives-and-programs/business-improvement-fund-for-residential-care

 

3 February 2020.