On December 15 last year, while most people were looking ahead to Christmas and thinking of sunny beaches and cold beers, the Federal Government released their mid-year economic and fiscal outlook (MYEFO). And the news wasn’t good; the outlook showed a $2.3 billion increase in the deficit since the May budget, which now looks set to reach $37.4 billion in 2015- 2016. Budget surplus rhetoric has now been replaced by talk of the need for avoiding extreme responses. One of the sectors to face cuts is the aged care sector.
In order to make savings over the next four years, the Federal Government announced new measures to recover $472 million from aged care services. As of this year, large fines will be introduced for any provider that makes inaccurate or false claims for government funding. The fines will be $10,800 for each false claim, accompanied by increased scrutiny and auditing. Alongside these measures, the Government also announced cuts to health workforce programs, with some aged care education and training programs set to go.
Given what we know of Australia’s ageing population and increasing demand for aged care services, both now and into the future, these cuts are concerning for us all, but especially for service providers. The cost of looking after someone in aged care is high, with costs often borne by the individual and their family, but government contributions are vital too. Moreover, there is already evidence of workforce shortages in this sector, so changes that might further lessen the pool of qualified staff are worrying.
According to Leading Aged Services Australia (LASA), it’s also questionable as to whether compliance is a major problem in the sector. In response to the MYEFO announcement, LASA pointed out that there have only been nine non-compliance notices issued since 2013, in response to more than 55, 747 Aged Care Funding Instrument (ACFI) claims. If this is the case, the Government’s measures look unlikely to raise the level of revenue required to contribute to a balanced budget.
What does it all mean for the aged care sector? For one, it means providers will have to continue to look at smarter and more efficient ways to continue to deliver quality care and market their services. But it also means providers, consumers and peak industry bodies will need to continue to lobby the Federal Government to invest in aged care if current and future demand for services is to be met.