What the 2017–18 federal Budget means for aged care

The 2017–18 federal Budget comes as a relief after previous federal Budgets have seen cuts to aged care funding and associated programs. There are a few initiatives in the Budget that are welcomed by our industry and will contribute to improved access to services for consumers and some system improvements for providers.

Specific aged care initiatives announced in the 2017–18 Budget are as follows:

• $5.5 billion over the forward estimates to extend funding arrangements for the Commonwealth Home Support Program;
• $3.1 million in 2017–18 to improve the My Aged Care IT platform;
• $1.9 million over two years to establish and support an industry-led taskforce to develop an aged-care sector workforce strategy; and
• $8.3 million over three years for home-based palliative care, coordinated through the Primary Health Networks.

Individually, and collectively, these Budget initiatives respond (in part) to the growing demands for age services in Australia and are welcomed by our industry.

The Budget reveals whole-of-government spending on aged care to total $81.8 billion over the 2017–18 to 2020–21 period. In this context, it is interesting to note that the government spend on aged care over time ($22.3m in 2020–21) is nearly on par with the government spend on hospitals ($22.7m in 2020–21). The projected spend on aged care shows an annual growth rate of around 6% over the forward estimates. This growth is at a greater rate than both the Medical Benefits Schedule and hospitals (both average around 5% per year across the forecast period).

The federal Budget provides near-term funding stability for the age services industry, affording our industry an opportunity to reflect and participate fully in the many policy and program reviews currently underway — without fear of ongoing funding cuts. While it is welcome that the Budget has no surprises for our industry, it does little to address some of the major issues we are facing. 

This point was acknowledged by Health Minister Greg Hunt in his Budget Night presentation to health industry stakeholders where he advised that the coming financial year will see a focus on aged care. There is no doubt that there is more work ahead and many issues to be considered and addressed in the coming financial year, as key reviews and initiatives currently underway (eg, Living Longer Living Better review, Workforce Senate Inquiry, Single Quality Framework, Aged Care Funding, etc) are concluded. The outcomes of these activities and impacts from a budgetary sense will no doubt feature in the 2018–19 Budget. 

So, in the very near term, we have some stability regarding funding. However, as LASA has been advocating, the aged care industry needs a sustainable funding strategy to ensure sustainability for providers and accessible, affordable, quality aged care for consumers.

Given this, LASA will continue to work on behalf of our members to ensure ongoing reforms realise the intent of the aged care reform agenda, are consistent with the Aged Care Sector Roadmap and address the pressing issues of our industry.