Published in The Age and The Sydney Morning Herald, 20 April 2021
Government budgets ask fundamental questions about country’s priorities – how much should be spent on submarines versus health, for example, while keeping taxes down.
Next month’s budget is when the federal government has to decide how much to spend on aged care, following last month’s damning final report of the Royal Commission into Aged Care Quality and Safety. Implementing the 148 recommendations detailed in the 10-kilogram report will cost billions.
An additional $10 billion a year could clear the 100,000-person waiting list, with higher-level care provided within a month of people being assessed. It could pay for better training and higher salaries for carers, and more staff in residential care homes. It could buy improved oversight of the system and employ thousands of care finders to help older Australians get care that meets their needs and preferences.
The royal commission was clear on its choice: users should not have to bear the burden of their care. No matter how good means-testing arrangements are, a user-pays system inevitably results in some people missing out on needed care.
But independently assessed care, such as nursing, is quite different. Australia has a universal health system, Medicare, and the vast bulk of GP services involve no out-of-pocket costs for patients. The same is true for disability services.
So where should government find the money? The short answer is we, as taxpayers, will have to contribute. It is a priority choice – if we want to end the horror stories we heard about in the royal commission, we’ll need to ensure more money flows into the government coffers and out to residential and home care services.
The royal commission proposed a 1 per cent Medicare-style aged care levy on taxable incomes. This would mean the median taxpayer putting in just $610 a year. Surveys suggest most Australians think that it is worth it.
Currently, only the first $214,500 of the family home is included in the pension assets test. As a consequence, people in multimillion-dollar houses can still draw a pension. Instead exempting the first $500,000 of home equity, and including any home value above that towards the pension means test, would be much fairer, and could save the budget billions each year to pay for aged care.
More money could also come from tightening up on excessively generous superannuation tax breaks for older Australians.
Australians recognise that the aged care system needs fixing. Now Australians need to recognise that we’ll have to pay to fix it.