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Productivity Commission signals $200 million Aged Care funding shortfall.

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Productivity Commission Signals $200 Million Aged Care Funding Shortfall Chris Evans - Shadow Minister for Family Services and the Aged

Media Statement - 23 November 2000

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In a speech to the Australian Nursing Home and Extended Care Association's National Conference in Perth today the Shadow Minister for Aged Care, Chris Evans, highlighted a Productivity Commission finding that the government is under-funding the aged care sector to the tune of $200 million in 2001.

"The under-funding of the sector inevitably puts nursing homes under pressure to compromise the care of residents in the face of increasing costs," said Senator Evans.

"The Productivity Commission has modelled cost increases in aged care and found a one-off increase of 5% due to the introduction of accreditation in 2001. That equates to extra costs of $200 million on the sector.

"The Government has failed to fund the one-off cost for accreditation, providing a meagre 2.1% increase for ongoing costs.

"So while an agency of the Government is factoring in the massive cost increase for accreditation, the Government denies any such increase will occur.

"The Minister cannot claim that accreditation will lead to better standards of care, while refusing to provide the additional funding that these improvements require.

"The many small nursing homes around the country, which are already struggling to remain viable, will be placed under even more pressure as a result of the funding shortfall.

"Unless the Government does address this growing crisis some of these facilities will inevitably be forced to close.

"In an earlier report, the Productivity Commission criticised the current arrangements as 'inequitable and inappropriate'.

"The Minister for Aged Care cannot afford to ignore continuing calls from the sector and the Productivity Commission to urgently review funding arrangements."

Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.