Most of us use Australia’s care system in some way, or know someone who does. After all, from birth to death, we all need support at one time or another.
But as royal commissions into aged and disability care, and national scandals in child care have shown, this care isn’t always good quality. Sometimes it’s not available at all. At worst, it’s harmful.
One of the major drivers of these failures is the very business model of care itself. In Australia, as in many rich countries, private businesses are delivering an increasing share of care.
But it wasn’t always this way. So how did we get here, and how do we reform the system to better serve all of us?
From birth to death, we all need to be cared for, but as years of headlines have shown, Australia’s care economy faces big challenges. In this four-part series, experts examine how the country’s increasingly for-profit models of care and the government policy that spurned them on are failing those they’re supposed to protect – and what can be done about it.
From charities to profits
As the welfare state developed in rich countries after the second world war, governments took on some of the care for children, older people and people with disabilities that families, mutual aid associations and charities had provided.
The degree of government involvement varied across the world, and looked different in different countries. In the high-taxing Nordic countries, for example, local councils built up extensive public care systems, offering child care, nursing homes and home care.
In Australia, lower taxation rates and long periods of conservative government laid different foundations. Our constitution also shapes how care services are funded and regulated by prescribing different roles for federal and state governments.
After the war, Australian governments provided some care services themselves. But they also funded private organisations, mostly not-for-profits run by churches and charities, to deliver them.
In the 1970s, the Whitlam government funded community organisations to provide care services alongside established bodies.
Further change has happened since the 1980s. Demand for care services began to grow, driven by population ageing, increasing workforce participation by women and changing community expectations.
Influenced by the ideas of “new public management” (also called “economic rationalism” and “neoliberalism”), Australian governments mostly relied on funding external organisations to deliver care services, rather than expanding public services to meet growing demand.
They used private businesses and market mechanisms as models. Australian governments adopted this policy paradigm and what is now known as the “privatisation” and “marketisation” of care services took off.
A voucher for care
In the privatisation of care services, for example, the New South Wales government sold the Home Care Service of NSW in 2016. This public institution was established in 1943 and became the largest provider in Australia of care and support to older people and people with disabilities living at home.
But the most important policy changes are better understood as “marketisation” because they change how governments fund care services and what kinds of organisations deliver them across the board.
The dominant model for government funding across child care, aged care and disability support is now a kind of voucher. Policymakers hope this funding model will enable “customer choice” in a “market” of diverse providers who compete to offer services.
It works like this: when a person is eligible for a service, the federal government assigns them an amount of funding and the person (or their family) is left to find a provider to receive the funding and deliver the service.
In child care and aged care, people with incomes above certain levels are also expected to pay some of the cost themselves.
So how has this worked in practice?
‘The great and the ghastly’
Under the voucher-style funding model, for-profit providers have increased their share of provision across most types of care service.
The result is, according to political and social scientist Mark Considine, a “wide mix of the great and the ghastly” that tends to “a low-average model” revealed in many royal commissions and inquiries.
Problems are inherent in how care systems are set up. Governments leave much of the location, design and organisation of services to providers.
And because these services are in high demand, providers can be sure of a steady stream of government funding into the future.
When the share of for-profit operators grows, gaps in provision and quality problems emerge as under-resourced regulators struggle to monitor operators at arm’s length.
Child care services are an example, but the broad pattern is repeated across aged care and disability support.
The share of long day care centres operated by for-profit businesses increased from 62% to 72% between 2016 and 2026. Of new centres opened over the decade, 95% are for-profit. Corporate chains have multiplied – 21 of the 25 largest long day care providers are operated for-profit.
On every measure of quality, including poor quality ratings and enforcement action for breaches of laws and regulations, for-profit providers are overrepresented compared to public and not-for-profit providers. Cost-cutting by large for-profits, especially on staff, drives many of these problems, while costs of care keep rising.
Providers use potential profitability to decide where to put centres because governments don’t plan the system. This leaves “child care deserts” around the country.
Buying and selling centres among for-profit operators is also big business. This creates “churn” that destabilises the sector.
Good care isn’t cheap
Many providers are working hard to deliver good care. But these problems arise because the market policy settings allow some providers to make business decisions to focus only on lucrative locations or that lead to poor quality.
And the costs of the long tail of poor private services are high, falling first on the people who are supposed to be being cared for.
The design of these care markets and the behaviour of bad providers also affects everyone in the system. All providers, both good and bad, get caught up in costly regulatory crackdowns and the loss of public confidence caused by bad performers.
Marketisation can lead to privatisation as trusted, high-quality public or community-based providers leave complex, fragmented and underfunded systems.
Governments are starting to address some of these problems. In early learning, the Building Early Education Fund was set up in 2024 to address the problem of child care deserts.
A raft of safety interventions was launched following the exposure of various catastrophic failings in child care in 2025 by the Australian government and state governments.
Recent legislative changes have made children’s safety, rights and best interests the “paramount consideration” in providers’ decision-making in early learning settings.
However, reforms that increase scrutiny by regulators and leave the rest of the “market” model intact will not work.
There are signs the iron grip that market ideology has had over Australian policymakers is starting to weaken.
It will take courage, time and money for governments to reorient care systems away from the market model towards what Considine calls a social model.
Under a social model, providers are connected to communities in an open, collaborative system and people who use services have a voice. Expertise from diverse sources – including clients, frontline workers, inspectors and researchers – is shared to drive innovation in the interests of clients.
Good care does not come cheap. Opportunistic corporate providers are deeply entrenched and commercial interests enjoy substantial protections. But Australians deserve better than the current arrangements.
Gabrielle Meagher, Professor Emerita, School of Society, Communication and Culture, Macquarie University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
Care Is Not a Commodity. It’s Time Australia Started Treating It as a Public Good
For too long, Australia’s care systems have been shaped by market principles and consumer choice. But care is fundamentally different from other services. It is time to reframe aged care, disability support and early childhood education as essential social infrastructure and a shared public responsibility.
As a Registered Nurse with experience across residential aged care and community care, I have worked alongside older people, families and care teams during some of life’s most challenging transitions. That experience has given me a frontline view of both the strengths and shortcomings of Australia’s care system.
I have sat with families exhausted by years of caring for a loved one whose health was failing. I have listened to adult children struggling to make decisions for a parent living with dementia. I have seen older people frightened about losing their independence and uncertain about where to turn for help.
None of them asked for more choice.
They asked who they could trust. They asked where they could find help. Above all, they wanted confidence that quality care would be available when they needed it.
When families are facing dementia, disability, frailty or declining health, they are not looking for a marketplace. They are looking for reassurance, expertise and support. They want to know that someone will help them navigate the journey ahead.
Australia’s greatest mistake was not introducing choice into care. It was assuming that care could function like a market.
For decades, governments have embraced the idea that competition would improve quality, increase efficiency and give people greater choice. The result has been a gradual shift away from direct stewardship of care systems towards a model in which governments fund services but increasingly leave access, growth and service provision to the market.
The consequences are becoming difficult to ignore.
Across aged care, disability services and early childhood education, we continue to see workforce shortages, service gaps, rising costs and ongoing concerns about quality and safety. Reviews, inquiries and Royal Commissions have repeatedly highlighted systems struggling to meet the needs of the very people they were designed to support.
The fundamental problem is that care is not a typical market.
Markets work best when consumers have time, information and the ability to walk away from poor services. Older people living with frailty or dementia, people with disability, and families seeking support for children are often navigating some of the most challenging periods of their lives. They are not approaching these systems as empowered consumers. They are seeking help.
Yet much of our policy thinking continues to focus on consumer choice.
In principle, choice sounds empowering. In practice, it is often far more complicated.
Many families entering aged care are already coping with declining health, hospital admissions, carer stress or major life transitions. They are expected to understand funding arrangements, compare providers, review service agreements and make significant decisions at a time when they are overwhelmed and vulnerable.
In my experience, most people are not asking for more choice. They are asking for trustworthy information, practical guidance and reassurance that quality care would be available when they need it. They want services that are accessible, reliable and responsive.
Choice without available services is not meaningful choice.
The assumption that vulnerable people can effectively navigate increasingly complex service markets overlooks the realities of ageing, disability, illness and caregiving.
Australia has spent decades asking how markets can improve care. Perhaps it is time we ask a different question: what would a care system look like if it were designed around people rather than providers, relationships rather than transactions, and community need rather than market demand?
Rather than focusing on how many providers people can choose from, we should be asking whether every Australian can access safe, high-quality care regardless of where they live or whether a service is commercially attractive to deliver.
Other countries have shown that care can be organised differently. In parts of Northern Europe, governments retain a much stronger role in planning services and ensuring equitable access. In the Netherlands, community nursing has been built around small self-managing teams that prioritise professional judgement, continuity and relationships. In Japan, population ageing has driven the development of a long-term care system based on the understanding that supporting older people is a shared social responsibility.
These systems are not perfect. No system is.
However, they demonstrate that there are alternatives to treating care primarily as a marketplace.
The debate in Australia should not be limited to whether providers are for-profit or not-for-profit. The more important question is whether governments are prepared to accept responsibility for ensuring care is available, sustainable and equitable.
We do not judge a society by the efficiency of its markets. We judge it by how it treats its most vulnerable people.
Children, older Australians and people living with disability should never be viewed as market opportunities. They are citizens entitled to safety, dignity and support.
We do not expect schools, hospitals, roads or emergency services to exist only where they generate a commercial return. We recognise them as essential infrastructure that supports a functioning society.
Care should be viewed in the same way.
At its core, care is not a transaction. It is a relationship built on trust, dignity, safety and human connection.
Until we stop treating care as a commodity and start treating it as a public good, we will continue to address symptoms rather than causes.
Australians deserve better than a system that asks vulnerable people and families to navigate a marketplace at some of the most difficult moments of their lives.
They deserve a system built on trust, equity and human connection.
Care is not a commodity. It is a social responsibility.
The critical paragraph is this one
“Perhaps it is time we ask a different question: what would a care system look like if it were designed around people rather than providers, relationships rather than transactions, and community need rather than market demand?”
The resulting exclusion of the very people who are supposed to be the objectives of the system and the major conference repeatedly refuses to give a voice to what they so obviously regard as enfeebled objects of their superior roles
That says it all
This article unfortunately takes shortcuts by lumping together child care and aged care. These are fundamentally different services and are run by very different providers. Child care does attract a lot of for profit providers, Aged care still has a majority of not-for profit (charity) providers. To call these AC providers privatised is very misleading.