The 2024 State of the Sector report by the Aged & Community Care Providers Association (ACCPA) was released recently and the inaugural report paints a comprehensive picture of Australia’s aged care landscape. It highlights critical challenges while recognising ongoing efforts to transform the sector amidst growing demand and systemic pressures. In today’s blog, we provide a summary of the key findings and insights out of this important sector review.
Financial Sustainability Challenges
The financial health of aged care providers is under significant strain. The report calls out how nearly half of residential care providers are operating at a loss, with home care margins continuing to shrink. The report reveals that providers earn a mere $1.80 per client per day in the current financial year, down from $3.20 in 2022–23. Regional and rural providers face even more acute difficulties due to limited economies of scale and workforce shortages, exacerbating their operational challenges.
Workforce Pressures
Workforce shortages remain one of the sector’s most pressing concerns, with providers reporting difficulty in recruiting and retaining staff, particularly in regional areas. New workforce requirements under recent reforms, while necessary, add to these pressures. A key statistic quoted, was that the majority of providers (64%) believe that reform implementation timeframes are too ambitious, further straining the sector’s capacity to adapt.
Reform and Readiness
According to ACCPA’s report, the aged care sector is at a critical juncture with the introduction of transformative reforms. While 51% of providers agree that reforms are headed in the right direction, the pace and complexity of changes pose challenges. A substantial 84% of respondents believe these reforms will impose additional financial and operational burdens, particularly for smaller operators. The report underscores the urgent need for a more balanced approach to reform, ensuring that providers have the support to meet rising demand sustainably.
Funding Gaps and Systemic Challenges
Government funding continues to be a significant concern, with 92% of providers identifying it as a top challenge. ACCPA emphasises that the chronic underfunding of aged care has created an unsustainable system, with stakeholders calling for a more predictable and adequate funding model that allows providers to invest in infrastructure and workforce development.
Additionally, the report highlights the sector’s perceived lack of readiness to accommodate a growing ageing population. Around 70% of providers are concerned about whether Australia is prepared to meet future demands. This apprehension underscores the need for long-term planning and investment in aged care infrastructure, in ACCPA’s view.
Towards a Sustainable Future
The report highlights the importance of a system-wide approach to aged care reform, by advocating for a rights-based framework, as recommended by the Royal Commission into Aged Care, and calling for enhanced collaboration between providers, government, and community stakeholders. In his executive summary, ACCPA CEO Tom Symondson stresses that creating a sustainable, high-quality aged care system is crucial for delivering better outcomes for older Australians. The challenges are vast, but so are the opportunities to create a system that truly meets the needs of Australia’s ageing population.
Download a copy of the full report here.