Catholic Health Australia (CHA) is Australia’s largest non-government grouping of health, community, and aged care services accounting for approximately 12 per cent aged care facilities across Australia, in addition to around 20 per cent of home care provision. Catholic aged care providers have a vital interest in working with the Australian Government to ensure the sustainable provision of aged care and support services for older Australians meet community expectations of safety and quality of care.

CHA appreciates the opportunity to provide input into the Commonwealth Budget’s priorities for 2024-25, and looks forward to continuing to work constructively with the new government in the execution of our joint commitment to improving health and aged care outcomes nationally.

Please note that CHA has also communicated our health priorities in a separate detailed submission. Many of the measures outlined there are applicable across the care sectors.

Financial sustainability amid rising costs

The aged care sector faces numerous economic headwinds while simultaneously working through the most comprehensive set of aged care reforms in decades. Broadly, cost pressures on residential and community aged care are rising, particularly labour costs. In addition to each individual staff member becoming more expensive to obtain and retain, there are significant shortages of staff which has been exacerbated by expanded staffing responsibilities under ongoing Commonwealth G0overnment reforms. In addition to increases in costs associated with CHA Members’ own workforces, this has led to a sector-wide increase in the use of agency staff in the second half of 2023. It remains to be seen if the market can adjust to this expensive increase in the use of agency staff.

The aged care sector is rarely profitable. Since 2020, just two quarters have seen an average sector marginal operating surplus (in each case, this surplus was very small). In those instances full year results indicated a loss.

Despite these cost challenges, early evidence suggests that the sector has passed on additional funding provisioned for Fair Work Commission funding increases in full. In some cases, providers appear to be offering higher pay to staff not covered by current Fair Work Commission decisions[1].

CHA’s submission should be read in the context of the challenging financial circumstances that Catholic aged care providers – and the sector more broadly – are facing.

I am very happy to meet with you, or arrange for you to meet with Catholic aged care providers from around the country, to provide any further information you need in support of these recommendations.

Yours sincerely,

Jason Kara
Chief Executive Officer
Catholic Health Australia

[1] StewartBrown. Aged Care Financial Performance Survey Sector Report (September 2023)