Oct 07, 2020

Federal Budget 2020: What does the government spending spree offer older Australians?

Last night the Australian government announced its Budget, a spending spree designed to overcome the impact of the pandemic on the economy and the individual lives of Australians. It will leave Australia with a gross debt of $1.1 trillion within four years.

Our youth, full-time employees and businesses seem to be the big winners in the Budget with job subsidies designed to hire our unemployed young people, tax cuts for employees and huge investment tax incentives for businesses. But what about older Australians? Where does this Budget leave them?

Home Care Packages

An additional 23,000 home care packages have been promised at a cost of $1.6 billion. It is important to note in the detail that just 2,000 of the 23,000 places offered are for level 4 assistance. This is the highest level of care, care needed to keep people out of residential homes.

The unprecedented investment has been welcomed, but highlights the fact that it is a problem that has long been unaddressed. The new spending will do little to put a dent in the massive waiting list which stands at almost 120,000.

Catholic Aged Care Services (CHA), the largest non-government grouping of aged care services in Australia, said in a statement that the “announcement of $1.6 billion 23,000 extra home care packaging is welcome but will still leave 80,000 people on the waiting list.”

Patricia Sparrow CEO of ASCA also highlighted the need to increase packages across the board. “There will still be thousands of people waiting for the right level of support or any support all”

Backing up the importance of Home Care packages, Sean Rooney, CEO of peak body LASA says that “our elders deserve this because the vast majority want to continue living in their own homes as they age.

“We hope this will help drive down people’s wait times for packages at their assessed levels, which has been heartbreaking up to two years of more”.

Waiting times remain a big issue of concern and there are calls for the government to target a reduced waiting time.

LASA is calling for the wait time to be reduced to “no more than three months”.

Ian Yates CEO of COTA Australia is calling for wait times to reduced even further and said older Australians “would be disappointed that there is still no commitment and plan to get waiting times down to 30 days and ensure no one is prematurely forced into residential care”

Addressing quality care

The government has announced it is investing $408.5 million to improve “the care and quality of the aged care system” This will take total spending to $23.9 billion for 2020–21. But is this adequate to address current needs?

In August we wrote on research presented to the Royal Commision that drew on the most comprehensive set of data ever harnessed for a study on residential aged care in Australia. It suggested that a minimum of $621 million is required, per year, to deliver current “best quality” levels. To improve overall quality would cost around $3.2 billion per year. In that context $408.5 million would not seem to be enough.

The response from the industry is one of gratitude for funding, but there is a strong belief that spending at this level will have very little impact.

CHA comments that “the sector needs an urgent injection of funding to tackle the triple whammy of declining revenues, rising costs and public expectations that standards need to rise”.

Sean Rooney of LASA is hopeful there will be to come

“Hopefully, this Budget is just a start, a down payment on a better aged care system” he said.

Coronavirus support

This budget includes $746.3 million to address coronavirus through previously announced initiatives. It will also cover the government’s responses to the recent requirements handed down by the Royal Commission’s investigation into the handling of coronavirus in aged care. This includes the need for Infection Control Agents.

LASA notes that “funding included in the budget for COVID-19 responses is welcome but represents only a partial continuation of measures for the first six months of the pandemic.”

Speaking to that point Mr Rooney said that “As we have said before, protecting older Australians receiving care and support in our aged care system from COVID-19 is a national responsibility and we believe more investment is required.”

Employment of older Australians

Older Australians have been completely excluded from the government’s employment incentives. This seems a gross omission and speaks to ageism that already exists within the Australian workforce.

There are a huge range and depth of economic stimulus measures included in the budget, including specific support targeted at getting young people employed. But nothing for older people.

“We are disappointed there is no parallel support to keep older Australians in work” says Ian Yates of COTA.

“They are equally vulnerable to redundancy, age discrimination and being locked out of the workforce, and we are fearful this will be exacerbated by the failure to match youth subsidies.”

Pensioners: Pension and Rent Assistance

Pensioners have been supported by two additional payments, $250 in December and $250 in March. The indexation formula did not deliver an increase this year and this goes part way to address that issue.

However, it is hard to not see it as merely a gesture when compared to tax cuts that are expected to deliver working individuals up to $2745.

Further, there has been no increase in the Commonwealth Rent Assistance maximum rate.

Ian Yates from COTA says “We are disappointed that this is no increase in the inadequate Commonwealth Rent Assistance maximum rate, and that older unemployed people will still have their savings plundered by the Liquid Assets Test at the very time they should have retirement savings protected.”

Additional spending

The a government has made allowances for additional aged care spending as follows:

  • $91.6 million has been assigned for reforming how residential aged care is funded. It is designed to enable independent assessments to deliver more accurate funding to meet the care needs of residents.
  • $10.3 million will be invested in the Aged Care Workforce Council designed to build a workforce with the required skills, attitudes and flexibility to provide high quality consumer‑focused care to older Australians, and increase recruitment and retention.
  • $10.8 million will be provided to ensure nurses are well equipped to improve the care and in particular, infection control in aged care as raised by the Royal Commission.
  • $11.3 million will tackle the misuse of chemical and physical restraints for people living with dementia and will provide more specialist counselling teams will be available to provide expert psychosocial services, including face-to-face and by video and telephone.
  • $29.8 million will support a Serious Incident Response Scheme to provide more staff to regulate the scheme, inspect services and provide safeguards for people in aged care.
  • $25.6 million is assigned for the Business Improvement Fund and to add funding capacity to provide grants to eligible residential aged care facilities that are experiencing financial difficulty.


Consensus across the board is that while this spending is appreciated it will do little to address the real issues in aged care.

Pat Garcia, CEO of Catholic Health says “We know more than half of aged care homes are currently operating at a loss, and almost 70 per cent are operating at a loss in regional Australia.

“Unless more money is made available now there is very real concern that many care homes will be facing closure.” she added.

Sean Rooney, CEO of LASA is equally concerned that this level of funding is inadequate.

“Looking ahead, it is incredibly important that Australia builds on these investments, not just to fix the aged care system but to provide significant contribution to our nation’s economic recovery from the pandemic,” he said.

ACSA CEO Patricia Sparrow is concerned the government is not focussed on real change. She says “This budget includes some…small and useful initiatives but the system needs a reboot not tinkering.

“The kind of financing and budget reform that is necessary to set up Australia for our ageing population means a total rethink – not just a series of announcements that prop up the current system.”

We hoped that in the spending spree the government has embarked on, they may have found a little more in the purse for older Australians. Alas it was not to be.

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