Labor's Position on Key Issues

Residential Aged Care Funding

February 05, 2019

As you may know, when last in government, Labor delivered the biggest reforms to aged care and ageing policy in a generation. Labor’s $3.7 billion strategy known as the Living Longer, Living Better aged care package provided a ten year plan to build a better, fairer, more sustainable and nationally consistent aged care system.

Labor laid a strong framework to build the aged care services that Australians deserve and progress was being made.

Unfortunately the inaction from the Abbott-Turnbull-Morrison Government has focused more on its own internal divisions than the needs of older and vulnerable Australians that has hindered the continued progress of these critical reforms.

The Liberals have also had a strong track record of cutting aged care funding.

In 2014 around $110 million was cut from the dementia supplement paid to residential aged care facilities to support older Australians living with dementia.

In late 2015, the Prime Minister Scott Morrison as Treasurer cut almost half a billion dollars from the Aged Care Funding Instrument (ACFI) which allocates funding for residential care in the 2015 MYEFO.

The Government did this on the basis of what it labelled higher than expected growth in expenditure, without consulting with the people who would be affected and without any concern about its impact.

Then, less than six months later Scott Morrison cut a further $1.2 billion from future residential care funding in the 2016 Budget. 

At the time the Government refused to release any detailed modelling around these cuts, raising concerns that it had no idea what impact the measures would have on the provision of care for vulnerable older Australians.

These cuts are now clearly impacting on the care delivered to older Australians.

The Abbott-Turnbull-Morrison Government has created unnecessary distress for aged care providers and consumers throughout this process and critically it continues to refuse to address the long-term instability and uncertainty of funding.

You may be interested to know the Leader of the Opposition Bill Shorten and the Shadow Minister for Ageing and Mental Health wrote to the Prime Minister to request he broaden the Royal Commission’s Terms of Reference to include a number of additional matters including funding.

Although the Prime Minister did not adopt all of Labor’s recommendations we are pleased that funding may be raised under a number of other clauses included in the Terms of Reference.

You can also follow the activities around the Royal Commission by visiting the website that has been set up to provide information about the Terms of Reference, the work of the Royal Commission, how submissions can be made and when and where hearings will be held. You can access the website by visiting this link

Labor supports a Royal Commission and we have been saying for a long time that the aged care system is in a state of national crisis.

When Bill Shorten said this in the Parliament in May, the Government likened it to committing elder abuse. We are glad it is now listening and has changed its mind. 
Labor also hopes that the Minister turns his attention to the Wollongong Report. The Government has yet to formally respond to this report and it has been sitting on the Minister’s desk for around 12 months. This report was commissioned by the Government and had a focus on residential aged care funding reform.

It is extremely disappointing that the Government has again not acted on this and more than a dozen other reports, reviews and inquiries.

Until the Liberal Government commits to genuine funding reform the uncertainty and unpredictability of aged care funding will continue to undermine the provision of care.