'A problem that needs to be fixed': Support for Medicare-style aged care levy

Medicare-style aged care levy backed by experts, advocates

Aged Care Royal Commission
Prime Minister Scott Morrison Picture: Dion Georgopoulos

Prime Minister Scott Morrison Picture: Dion Georgopoulos


A peak seniors' advocacy group has backed the introduction of a Medicare-style levy to fund Australia's broken aged care system.


A peak seniors' advocacy group has backed the introduction of a Medicare-style levy to fund Australia's broken aged care system.

But National Seniors Australia says there must be "forensic" oversight of how and where the funds are spent, to ensure they aren't channelled into the pockets of private providers.

The Morrison government has left the door open to adopting a recommendation from the aged care royal commission to introduce a new tax to help fund the sector.

The commission's final report, handed down on Monday, was highly critical of successive governments' approaches to aged care funding, arguing it had become a priority to "restrain" growth in spending.

"This priority has been pursued irrespective of the level of need, and without sufficient regard to whether the funding is adequate to deliver quality care," the report said.

The report called for the federal government to use a new tax to help properly fund the system, although commissioners Tony Pagone and Lynelle Briggs were split on the best approach.

Commissioner Pagone recommended the Productivity Commission examine the idea of a "hypothecated levy", an impost where the revenue generated can only be spent on one purpose - in this case, aged care.

In contrast, commissioner Briggs called for an option modelled on Medicare, proposing the introduction of a 1 per cent income tax levy from July 2023.

National Seniors Australia chief advocate Ian Henschke supported the idea of a new levy, drawing parallels between Australia's universal healthcare system and what was now needed for aged care.

"What we know about the people that are in aged care is that they are at the frailest stage of their life and when they go into care, often it's directly from the hospital and they have reached a critical point of frailty," Mr Henschke said.

"So in fact aged care homes are no longer lifestyle choice or some sort of retirement village where people sit around singing songs around the piano."

Mr Henschke said there would need to be "forensic tracking" of money raised through a levy, as he warned against allowing any extra taxpayer to fall into the hands of "shareholders of a private corporation in an offshore tax haven".

"If you think about it, the obligation and duty of government it is to provide an adequate, and in an ideal world, a very good health system. It is not there to provide funds for either the not-for-profits or for-profits to carry on their business operations," he said.

Grattan Institute health program director Stephen Duckett supported a new levy, saying the other option to raise revenue - a user-pays model - was "inherently inequitable".

Dr Duckett said he preferred commissioner Briggs' Medicare-style proposal, describing it as an efficient tax which would be easier for the federal government to "describe and sell".

He said public sentiment suggested there would be support for a new levy aimed at helping the sector.

"We have seen over the past 18 months, the harrowing stories about aged care," he said.

"So the issue is: is this a priority that ought to be fixed?

"The opinion evidence appears to be that it is.

"Is it a priority for the Australian public and for government to say we don't want our old people to be starving to death in nursing homes? I think the public case has been made that it is a problem that needs to be fixed."

Aged Care Minister Greg Hunt said cabinet would consider the royal commission's recommendations before laying out a major overhaul of funding in the May federal budget.

The Canberra Times contacted the office of Labor spokeswoman for ageing and aged care services, Clare O'Neil, about the party's position on a Medicare-style levy, but was told she was unavailable for comment.

Opposition Leader Anthony Albanese has said there needed to be proper funding, real regulation and a fix for workforce issues in the sector.

The Greens said work to fix the broken aged care sector must start immediately.

"For too long, aged care has been put in the too-hard basket. The royal commission report clearly shows that years of tinkering around the edges has fundamentally failed older Australians," Senator Rachel Siewert said.

- with AAP

The story 'A problem that needs to be fixed': Support for Medicare-style aged care levy first appeared on The Canberra Times.