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It’s easy to see why most people believe that the aged care sector was the big winner in this year’s budget delivered by Federal Treasurer Josh Frydenberg on 11 May 2021. After all, it promises nearly $18 billion in additional funding over the next five years.

The need for increased funding has been apparent for many years. It did however take the evidence presented to the recent Royal Commission into Aged Care Standards and Safety and the damning findings made by the Commissioners to bring home to the government the urgent need to take major steps and inject significant additional money into the system.

Some of the steps are ‘no brainers’. The provision of $6 billion to fund an additional 80,000 Home Care packages is overdue given that the current waiting list to access these packages has over 120,000 people. These are all people who all have been approved already to receive a package yet many have been waiting 18 months or longer to receive their funding. Providing money for these packages makes good economic sense too as the cost of subsidising the care of a person in their own home is much less than the cost of looking after them in permanent residential care.

The federal budget includes almost $8 billion over four years to reform residential aged care with around half of that going towards funding and reporting a minimum of 200 care minutes for residents each day. Providers will also be required to report care staffing minutes at the facility from July 2021 as part of existing annual reporting and to report to individual residents and their relatives monthly from July 2022.

Many in the industry believe that these lofty goals will not be met. They report ongoing difficulties in finding appropriately qualified staff, particularly but not only, registered nurses. This has been exacerbated recently by the departure of many foreign students from Australia because of COVID-19 and the closure of the country’s borders. Many of these students funded their studies by working part-time in the aged care sector.

A major part of the problem is the low pay rates in the aged care sector. Unfortunately, while there is a big focus in the budget on funding training places to attract more people into the sector this is unlikely to happen while the pay rates are near the bottom of the labour market. The budget does not address this issue at all and handballs the matter to the Fair Work Commission.

About 12 years ago I was on the board of a not-for-profit aged home in Perth. The then CEO commented ruefully that his care staff were being paid less per hour than his 20-year-old son who was working part-time as a porter at a city hotel.

The lofty goal to provide significantly increased individual care hours is unlikely to be met. One of the goals is that the 200 minutes will include 40 minutes per day per resident with a registered nurse. Most (if not all) industry leaders say that there are simply not enough registered nurses in the country to enable the providers to meet this requirement.

Mr Mark Sheldon-Stemm of the firm Research Analytics, a consultant to the industry, calculated that a 64-bed facility would need to provide 42 hours of care with a registered nurse per day, which would effectively mean having six or seven registered nurses on each day. This clearly would be beyond the financial capability of most facilities.

Change needs to occur and the budget is a good first step. It is a pity the Treasurer did not consult more widely with the aged care industry before he finalised the budget.

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