Health - Aged care

Budget Review 2010-11 Index

Budget 2010–11: Health

Aged care

Rebecca de Boer

Funding and policy arrangements for aged care have long been subject to calls for significant structural reform. In response to the recommendations of the National Health and Hospitals Reform Commission (NHHRC) and as part of the National Health and Hospitals Network (NHHN), the Government has announced that it will assume full funding and policy responsibility for aged care in all states and territories apart from Western Australia and Victoria. In addition, the Government has announced the Productivity Commission will inquire into options for further structural reform of aged care and report by April 2011.[1]

Although the specific arrangements for aged care in the NHHN are lacking in detail, the recurring themes are improved integration of aged care with other parts of the health care system as well as greater availability and flexibility of care in the community. Funding has been allocated to:

  • expand the capacity of multi-purpose services to provide aged care or sub-acute services
  • improve access to general practice and primary health care for older Australians in residential aged care facilities
  • incentives for community care providers in regional, rural and remote areas; and extra ‘one-stop shops’ to assist older Australians in accessing information about aged care assessment services.

The benefits of these initiatives may take some time to realise but represent the first stage of the Government’s commitment to full policy and funding responsibility for aged care.

The Budget provides $10.8 billion for aged and community services in 2010–11, part of a $47 billion package over four years.[2] The majority of this funding is directed towards residential aged care and community aged care packages, but there is some additional funding for the aged care workforce, improved access to primary care services and zero interest loans for capital infrastructure.

In contrast to previous budgets, this Budget contains greater investment in the aged care workforce. Over $310 million over four years has been allocated to a combination of workforce programs, including additional nursing places and scholarships, incentive payments for the aged care workforce to undertake additional training and/or upgrade qualifications and the introduction of the Aged Care Nurse Practitioner Program which will promote access to aged care nurse practitioners as well as explore appropriate models of care for aged care nurse practitioners. The Australian Nursing Foundation (ANF) was supportive of the Government’s announcements but continues to lobby for minimum staffing levels in aged care.[3] 

Previous budgets that have focussed on the return of nurses to the aged care workforce have met with limited success.[4] The budget announcements are intended to create a career pathway in aged care, provide greater flexibility for training initiatives and assist the industry in recruitment and retention of the aged care workforce.[5] There are considerable workforce shortages in aged care and it remains to be seen whether these measures will address this. Furthermore, the aged care workforce is ageing and unless there are sufficient incentives to attract nurses to aged care, this will remain an ongoing policy challenge for government. For further analysis of aged care workforce issues refer to the Health Workforce brief in this publication.

Peak lobby groups and aged care providers all expressed disappointment that there were no increases to aged care subsidies in the Budget.[6] The funding gap between government payments and the costs of providing residential aged care is considered ‘unsustainable’[7] and insufficient to meet both community and government standards of care.[8] Complex policy issues, such as accommodation bonds and reform of aged care funding and regulatory arrangements, have been referred to the Productivity Commission. However, it was argued that interim arrangements should be established to address this perceived shortfall.[9] Under the current arrangements many aged care providers consider the building of new nursing homes unaffordable.[10] Furthermore, the future viability of the sector has been described as ‘untenable’ under the current arrangements.[11]

One of the more notable initiatives in the aged care budget was the introduction of consumer-directed aged care packages. These were a recommendation of the NHHRC and will give older Australians and their carers greater flexibility and choice about the type of care they access.[12] Under this initiative, consumers will be able to tailor their care to their needs and make decisions about the design and delivery of the care provided to them. This represents a shift from the current model where care is largely linked to the package, not the consumer. Implementation will be phased, with 500 consumer directed packages to be released in 2010–11.[13] The Government has not detailed what support (if any) will be provided to consumers about making decisions in relation to their care or when negotiating with service providers to ensure value for money.

[1].    Productivity Commission (PC), ‘Caring for Older Australians: public inquiry’, PC website, viewed 13 May 2010,

[2].    J Elliot (Minister for Ageing), Building a national aged care system, media release, 11 May 2010, viewed 12 May 2010,$File/amedia07.pdf

[3].    Australian Nursing Foundation (ANF), Aged care workers and residents big winners in Budget 2010, media release, 11 May 2010, viewed 12 May 2010,

[4].    As at February 2010, only 139 nurses (of an anticipated 1000) had returned to the aged care workforce under the Bringing Nurses Back into the Workforce initiative. See Senate Community Affairs Legislation Committee,  Hansard, Additional Estimates 2009–10, 10 February 2010, viewed 15 May 2010,  CA 121,;fileType=application%2Fpdf#search=%22committees/estimate/12751/0003%22

[5].    Australian Government, Portfolio budget statements 2010–11: budget related paper 1.11: Health and Ageing Portfolio, Commonwealth of Australia, Canberra, 2010, p. 164.

[6].    See media releases from: Anglicare, Federal Budget: a ‘restraint too far’, media release, 11 May 2010, viewed 12 May 2010, ; (COTA), Federal budget – aged care still in waiting, media release, 11 May 2010, and Aged Care Association Australia (ACAA), Budget 2010: a mixed bag for aged care, media release, 11 May 2010, viewed 12 May 2010, Also refer to J Breusch, ‘Nursing homes press funds case’, Australian Financial Review, 14 May 2010, p. 20, viewed 12 May 2010 http://parlinfo/parlInfo/search/display/display.w3p;adv=yes;db=;group=;holdingType=;id=;orderBy=customrank;page=0;query=Author%3Abreusch%20Date%3A14%2F05%2F2010%20Dataset%3Apressclp;querytype=;rec=1;resCount=Default

[7].    Anglicare, Federal Budget: ‘A restraint too far’, media release, 11 May 2010. op. cit. Refs 8,9,10,11

[8].    ACAA, Budget 2010: a mixed bag for aged care, media release, 11 May 2010.

[9].    COTA, Federal budget – aged care still in waiting, media release, 11 May 2010 and Anglicare, Federal Budget: ‘A restraint too far’, media release, 11 May 2010.

[10]. J Breusch, ‘Nursing homes press funds case’, Australian Financial Review, 14 May 2010, p. 20.

[11]. N Bita, ‘Nursing homes failing on care, The Australian, 17 May 2010, p. 4, viewed 17 May 2010, http://parlinfo/parlInfo/search/display/display.w3p;adv=yes;db=;group=;holdingType=;id=;orderBy=customrank;page=0;query=Author%3Abita%20Date%3A17%2F05%2F2010%20Dataset%3Apressclp;querytype=;rec=1;resCount=Default

[12]. Portfolio budget statements, op. cit., p. 193.

[13]. Ibid.