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Does the aged care package deliver on Royal Commission recommendations?

Minister for Health, Greg Hunt, claimed that the aged care Budget package represented “generational” and “transformative” change but will the $17.7 billion deliver the system overhaul recommended by the Royal Commission into Aged Care Quality and Safety?

Charles Maskell Knight is sceptical. As he previously has written in Croakey (here and here), the problems in aged care cannot be addressed without fundamental changes to the way in which funding is provided and oversighted by the government.

Now more details of the funding package are available, Maskell-Knight, looks at whether it delivers these changes and identifies key areas in which the government has ignored or moved away from the recommendations of the Royal Commission.


Charles Maskell-Knight writes:

The first thing to say about the Budget is that it included a lot of new money for aged care. $17.7 billion is not inconsequential – even if it is over five years. Expenditure over the last two years of the forward estimates of $5.5 billion presumably reflects a steady state after everything has been implemented.

However, the Royal Commission found that the current level of spending is over $9 billion less than it would have been if services had been properly linked to population and expenditure had been appropriately indexed.

Money isn’t everything, of course. Minister Hunt indicated this evening that the Government had tabled its full response to the Royal Commission in Parliament, but unfortunately it does not seem to be publicly accessible yet. In the absence of the response it is difficult to understand the policy nuances behind some spending decisions.

Big ticket items

The big-ticket items are:

  • spending on home care – another 40,000 places in both 2021-22 and 2022-23 at a total cost of $6.5 billion;
  • a minimum requirement for 200 minutes of residential direct care time per day (including 40 minutes of RN time) at a cost of $3.9 billion;
  • an increase in Government funding of $10 per day per resident for living expenses, at a cost of $3.2 billion.

However, the Royal Commission recommended that people should wait no longer than a month between assessment and service commencement by the end of 2023-24. A commitment to fund a fixed number of places is not the same thing.

The Royal Commission recommended a two-step approach to increased care time, with 200 minutes from 1 July 2022 and 215 minutes from 1 July 2024. The Government has simply ignored the second step, together with the recommendation to have a registered nurse on duty 24/7 from 2024.

Another big-ticket item would have been increasing wage rates. There does not appear to be any funding allocation for this.

Better accountability for funding

A number of commentators have suggested that there is no point spending any more money on aged care unless there are improved mechanisms to ensure that the money is spent on care. While the Department of Health budget pack has a cryptic dot point on page 4 to “enhanced financial reporting transparency” there is no further detail anywhere in the document about what this involves.

An important recommendation of the Royal Commission (albeit in two different formulations) was that decisions about unit prices to be paid by the Government should be taken out of the hands of Ministers and made by an independent authority.

The Government had decided to augment the role of the Independent Hospital Pricing Authority to undertake costing studies of aged care to “inform” Government decisions. This is a long way from the Commissioners’ recommendations.

One of the Royal Commission recommendations which received relatively little coverage was a proposal to establish a Seniors Dental Benefit Scheme.

This has been completely ignored – although the Government has decided to yet again extend the National Partnership Agreement with the states covering public dental services by twelve months.

Oversight of the sector

One of the major disagreements between the two Royal Commissioners related to the structural arrangements with government for oversight of the age care sector.

The Government has decided against the Aged Care Commission model proposed by Commissioner Pagone, which would have eroded Ministerial responsibility and blurred the lines between service delivery and regulation, and retained a departmental model with an independent regulator.

A full assessment of the Government’s response to the Royal Commission report will need to be informed by the text of its formal response once this is available.

However, on the evidence of the Budget expect to see a lot of “accepted in part”. The Government is doing what it usually does to independent reports and cherry-picking those bits it accepts and is prepared to fund, and ignoring the rest.

It can claim to have spent a lot of money. But it cannot claim to have implemented many of the central recommendations of the Royal Commission.


Join the discussion

Croakey will continue to cover the reaction to the Budget both here and on Twitter using the #Budget2021Health hashtag.

Join our #CroakeyLIVE discussing the health impacts of the Budget on Friday, May 14 from 1.30pm-2.30pm AEST.

Register here.


See Croakey’s articles on #Budget2021Health.

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2019 Conferences