The Albanese Labor Government’s announcement today is a clear admission it has created a serious crisis in residential aged care, and it is older Australians with private health insurance who will be forced to pay the price.
Shadow Minister for Aged Care Anne Ruston said Labor’s decisions over the past two years have actively undermined investment in the sector and left older Australians without access to care.
“Once again, this is Labor being forced to clean up a crisis of its own making,” Senator Ruston said.
“The Albanese Government has spent the last two years actively discouraging investment in aged care – cutting the residential aged care provision ratio, banking billions in savings, and sending a clear signal that new bed builds weren’t a priority.
“Labor knew demand was rising, yet deliberately reduced funding for residential aged care and failed to deliver enough home care packages to pick up the slack.
“This has left older Australians stuck in hospital beds and languishing on waitlists without the care they need.”
In the 2023–24 Budget, the Albanese Government cut funding to residential aged care, delivering $3.4 billion in savings over six years by planning to deliver fewer residential aged care places despite the growing demand from our ageing population.
However, the Government is falling well short even of its reduced target. Departmental data shows only a net increase of 802 residential aged care beds in 2024–25, with forward projections indicating around 1,700 new beds in 2025–26 and 4,000 in 2026–27, significantly below what is required to meet demand.
At the most recent Senate Estimates, Health Department officials confirmed demand for residential aged care is increasing by an average of around 10,600 people every year.
Senator Ruston said the Government was now shifting the cost burden of its failures onto the more than one million older Australians with private health insurance, at a time when premiums were rising by the highest level in nearly a decade.
“It is incredible that Labor is asking older Australians to pay for this mess themselves by stripping away higher private health insurance rebates for over-65s.
“This is a false economy. If Australians aged over 65 can no longer afford to pay for private health insurance, this will only add to the burden on our public health system.
“Based on the Minister's own estimates, around 60,000 older Australians will be forced to drop their private health cover as a result. That's 60,000 more people relying on our public hospitals at a time when they are already overrun.
“Labor must start taking responsibility for its own failures. Older Australians should not be forced to pay the price for Labor’s reckless decisions and budget mismanagement.”
ENDS
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