Let’s hit the nail on the head early on a key claim that is already being widely circulated about the aged care sector. It’s one that is likely to continue to be spread despite the government’s efforts to get ahead of Four Corners tonight with a preemptive royal commission. And it’s completely wrong: this government did not cut $1.2 billion from aged care funding.
It’s pretty easy to check. In Labor’s last budget in 2013, residential care funding — as distinct from home or community or flexible care, the other categories of aged care funding — was $8.3 billion and forecast to rise to $10.1 billion in 2016-17. The 2017-18 budget shows how much funding the Abbott/Turnbull/Morrison/watch-this-space government actually spent on residential care in 2016-17: $10.9 billion. That is, the Coalition spend nearly $1 billion more than Labor forecast. And that rose to $11.4 billion in the year just ended.
This year’s budget papers annoyingly combine residential and home care numbers (a key strategy in aged care is keeping people out of residential care and in their own homes as long as possible), but the combined total still increases by another $800 million this year.
No cut. Of any kind. Zero. Zip. Nada.
The “cut” allegedly made by the Coalition was in the 2015 Mid Year Economic and Fiscal Outlook and the 2016 budget, which totaled $1.67 billion. The Parliamentary Library describes it here. That was a change to the Aged Care Funding Instrument (ACFI), which is the assessment tool used to determine which care category residents fall into and therefore how much subsidy the government provides for their care. It accounts for the bulk of residential aged care spending. Who makes the ACFI assessments on which subsidies are based? Residential care providers.
If you haven’t spotted the flaw in that system merely from the description of it, I have a Harbour Bridge-shaped nursing home to sell you. ACFI was being rorted by for-profit residential care providers by assessing people into more expensive categories than they needed to be. Moreover, they boasted about how much money they were making from it to investors. So the government stepped in and curbed the dramatic growth in ACFI funding. Ending rorting is not cutting funding.
Prior to 2016, aged care funding was a rare area of bipartisanship: the Gillard government had significantly altered aged care funding in the wake of the Productivity Commission’s 2011 report. Unusually, Tony Abbott declined to exploit the issue politically, in effect creating a unity ticket with Labor going into the 2013 election.
As Michael Pascoe noted in 2016, the entire model of aged care funding is problematic when it provides incentives for providers not to improve the condition of their clients but simply meet minimum standards. Sure, nearly everyone who enters a nursing home is not looking at recovery and departure back into independent or assisted living, but there are a wide range of conditions experienced by the elderly that affect quality of life and remaining longevity and which are not amenable to a funding model that pays providers more the sicker they get.
That is, whatever the crimes, misconduct and corporate evil practised by individuals, non-profit and for-profit providers in the sector, the real issues are likely to be systemic and structural in nature every bit as much as failures of quality regulation processes, workforce problems and individual training, accreditation and remuneration practices.
All of these issues have been repeatedly addressed by inquiries over the last 20 years. How a royal commission, especially one adopting a highly legalistic approach, will add to the accumulated wisdom of parliamentary committees, eminent-person reviews and regular bureaucratic monitoring isn’t at all clear. But the fact that Scott Morrison spent much of his media conference announcing a royal commission having to refute the funding cut lie doesn’t augur well for a return to bipartisanship.