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Labor open to aged care levy as part of bipartisan funding agreement

Paul Karp
·5-min read
<span>Photograph: Mick Tsikas/AAP</span>
Photograph: Mick Tsikas/AAP

Labor’s aged care spokeswoman, Clare O’Neil, has signalled the opposition may support a levy if the government proposed it in the May budget, saying a bipartisan agreement on aged care funding would be a “great outcome”.

O’Neil told Guardian Australia although Labor doesn’t have a “fixed view” about how to meet the $10bn per year funding gap identified by the aged care royal commission, it was “absolutely clear” the system was in crisis and “funding is at the heart of the problem”.

On Monday, the prime minister, Scott Morrison, recognised the “generational paradigm shift” to a needs-based funding system as recommended by the commission presented a major test for the government.

Related: From funding to a right to care: the aged care royal commission's key recommendations

He said the Coalition does not “lean” towards higher taxes, and attempted to deflect questions by noting Labor had withheld its support for a Medicare levy to support the NDIS.

On Tuesday, the health minister, Greg Hunt, refused to say if the Coalition will propose a levy in the budget, citing “a split recommendation” from the two commissioners.

Both commissioners supported an aged care levy, although Lynelle Briggs recommended a flat rate of 1% similar to the Medicare levy and Tony Pagone suggested the Productivity Commission consider a levy large enough to fund the entire system.

O’Neil said Morrison and Hunt had done “lots of emoting” about the problems but failed to take responsibility for “overseeing the deterioration” in aged care for eight years.

O’Neil said the government’s initial injection of $452m is “not such a significant amount of money” and it should have been prepared to show it was serious because the problems had already been identified in 22 reports to government including the commission’s interim report.

Briggs found at least one in three people accessing residential aged care and home care services had experienced substandard care. The report identified food and nutrition, dementia care, the use of restrictive practices, and palliative care as urgent areas for improvement.

O’Neil said the aged care sector had suffered from “years of atrocious neglect”, starting with the Howard government’s efficiency dividend in 1997 and continued by a $1.7bn cut by the current Coalition government.

Related: Older Australians give smart tech a thumbs up for music and video chat – but not vacuuming

“Whatever happens from here we need big change, and big change is going to be costly,” she said.

O’Neil said Labor “can’t solve the problem from opposition” but was “open to the discussion” on a levy because “resourcing is core to every problem talked about in the sector”.

Asked if bipartisan support would be desirable on funding, O’Neil replied it would be a “great outcome”.

“The government needs to come forward and seek Labor’s support for it. It’s clear that significantly more needs to go into the sector.”

O’Neil said she “definitely agrees” with concerns that the extra funding must go towards care rather than profits, blaming the Howard government for allowing profit providers while “essentially taking away regulation” controlling how funding was spent.

“We don’t know how many care hours are being provided to people in aged care, we don’t how many staff are in the centres – this is basic information about the care provided.”

O’Neil said this was “totally inappropriate” given the level of government subsidy to the sector. Labor was “looking at” the commission’s call for minimum care hours, which includes a minimum number of care hours by a registered nurse.

O’Neil rejected the approach proposed by Pagone for a regulator totally independent of government, arguing this would result in “less accountability” by taking it “completely out of the hands” of ministers answerable to parliament.

O’Neil said the recommendation for a new Aged Care Act to put the needs of aged care residents first and ensure providers were responsible for their care was “very sensible and important”.

The Greens leader, Adam Bandt, has called for an immediate $3bn injection into aged care and to reverse privatisation in the sector.

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The Greens’ aged care spokeswoman, Rachel Siewert, said Morrison is “finally talking about implementing a needs based system for aged care” but questioned whether he is willing to spend the billions required to fix it.

“The government’s initial response is the absolute bare minimum. They didn’t mention the need for additional home care packages to clear the waiting list or commit significant funding to deliver reform.”

The initial $452m injection will help hire 18,000 extra aged care workers.

The Health Services Union secretary, Gerard Hayes, said that economic modelling it commissioned found that an additional 59,000 aged care jobs and close to 90 minutes of additional resident care per day would be needed.

That could be funded through a 0.65% increase in the Medicare levy, he said.

“This is a crisis that has been brewing for years and the federal government has had plenty of time to prepare for it. It’s lack of ambition is appalling.”