Catholic Health Australia – Submission on the proposed new Financial and Prudential Standards

CHA appreciates the opportunity to provide input into the Aged Care Financial and Prudential Standards 2025 Exposure Draft (ED) and to the guidance and consultation document The new Financial and Prudential Standards | Aged Care Quality and Safety Commission (the guidance and consultation document). We look forward to working with the Aged Care Quality and Safety Commission (the Commission) during the drafting period to ensure the new Standards achieve their intended outcomes. Our goal is to ensure they fully support a high-quality and safe aged care system for all Australians irrespective of their wealth or geography.

CHA is supportive of the intent of the new Standards in addressing the Royal Commission recommendations that the Australian Government has an interest in managing its prudential risk. CHA also appreciates the work undertaken by the Commission to address the Royal Commission recommendations on ensuring financial viability of the aged care sector. However, as drafted, the proposed Liquidity Standard would have a significantly detrimental impact on providers’ operations and the investability of the aged care sector to little discernable benefit on the sector’s financial and prudential health. This is unwarranted given that it is the understanding of CHA and its members that there have been very few prudential failures in the aged care sector. The proposed standard unduly penalises providers who have been financially responsible and prudent. CHA and its members have serious concerns relating to the scope outlined in the proposed new Liquidity Standard, with extensive unintended consequences noted on investing in property and refurbishments; on retirement villages, independent living units and other entities of the provider; and on the ability of CHA members to invest in our Mission work. The transition timeframe is also far too short and would be extremely hard for many providers’ Boards to comply with.