The ripple-effect of compassion: the economic neglect of our aged care sector

Caring for others creates the spirit of a nation. 

Australia’s care sector floats on the intrinsic bed of community generosity, support and altruism. This fundamentally self-less sector is made up of a diverse range of carers, stretching from nursing support workers, to aged and disabled carers to childcare assistance. However, while these services extend their collective hand in compassion to our most vulnerable, they often receive a closed fist in return from government support. 

25 billion dollar ‘House of Cards’

One sector that has come to attention in recent months is the conglomeration of aged care services that suffered the short end of the economic support stick amidst a raging pandemic. The Royal Commission into Aged Care Quality and Safety was launched in October 2018 after news of the appalling state of care and staffing levels in aged care homes. In essence, the aged care and health services sector has long been described as a ‘house of cards’. The sector has been experiencing bouts of potential insolvency over recent years with more than $10 billion owing in loans from the big four banks. 

Not to mention, the industry is being dragged under the water as many residents exit the system due to COVID-19 fears, taking their deposits with them. Aged care homes often rely on the inflow of new deposits in keeping their cash flow buoyant. However, a report by accounting firm StewartBrown revealed that many providers were refunding over $1.25 billion in deposits due to falls in occupancy. Ultimately, this limits the ability of the sector to secure much needed bank loans.

“The compounded effect of the first shutdown with the current increased spread of the virus will lead to potential insolvencies happening during the infection period.”

Ansell Strategic

A much needed car repair 

There have been years of yearning from the sector for immediate funding, additional staff and regulatory guidance from the Federal Government. As of yet, the Federal Government has failed to extend a much-needed olive branch to the health services sector, despite the $25 billion in total income that it generates a year. Why? With the bulk of COVID-19 economic supports being funnelled into aiding retail and corporate sectors, the government ostensibly switches to a “business as usual” approach when facing care services. 

We continue to shovel fuel into a vehicle that is close to collapsing from a stalled engine, dislocated bumper and four flat tires. It doesn’t help that when this aged care vehicle was sold second-hand to the private sector, long-term public investment in frontline services depreciated acutely. Instead of moving “alleviation money” in and out of the system to keep staff employed, we need a total re-vamp of the care service system itself, from the wheels up.

Recently, the Royal Commission’s report on the impacts of COVID-19 has received increased attention amidst the adversities that have struck aged care homes as a result of the pandemic. The Special Report revealed in August, urged for a comprehensive reform of the aged care system, specifically recommending the creation of an aged care advisory body, mandated staffing ratios, increased case managers and immediate home-care package funding. If implemented, these reforms would create around 30, 000 jobs within the aged health sector by 2030.

In response to the Commission’s interim report, the Federal Government announced an initial $40.6 million in immediate funding to the aged care sector, to be buttressed with an additional $10.8 million to expand nursing and skill development programs. But the aged care sector is no stranger to the reality of empty pledges. In last December’s Mid-Year Economic and Fiscal Outlook (MYEFO), the Federal Government was willing to commit $850 million to 10,000 additional home care packages. These packages would enable elderly individuals to be cared for within the comfort of their own homes.

But service constantly delayed, is service constantly denied. 

With the waiting list to receive home care packages continuing to spill over the edge, the creation of more places needs to be a priority in aged care reform. We need to start embracing an ‘express delivery’ culture for care services that look after our most deserving. Free shipping, free warranty. While the interim report recommends a maximum waiting time of 1 month, the stark reality is that many elderly patrons are waiting up to 12 months to receive a package. 

The ripple-effect of compassion 

Not to mention, increased funding to the care sector is not only needed but completely justified. A commitment to boosting the industry financially would not only expand the supply of care workers, but also instigate the rise of care worker wages. Allowing unpaid carers in a female dominated area would not only hoist the national labour supply by 2 per cent, but also address the gender pay gap by helping women receive their well-deserved wages. As the National Foundation for Australian Women (NFAW) annual statement suggests, aggravating economic friction in the care sector would act to offset the neglect of primarily female-dominated industries in the recent federal budget tax cuts. 

All in all, it seems clear that a total reform of the sector provides a clear path to a more effectively, compassionate and expedient aged care sector. This would include the appointment of a new independent watchdog, additional home package placements and the introduction of new aged care COVID-19 protocols. As the former second lady of the United States once stated, ‘Caring for others creates the spirit of a nation.’ It remains an effective reminder that much of our economy floats on the rudimentary acts of caring for each other. 

The Royal Commission’s final report comes out on February 26.