Port Augusta City Council has sold its two nursing homes. 

Local government agencies throughout Australia are asking if aged care is their core business, writes Cam Ansell.

While many community projects for older people originated from municipalities, the reform process is creating a highly competitive and attractive market for the private sector. Given the broad set of responsibilities already managed by local government, many are concerned that these services create a disproportionate burden and draw on ratepayer resources. If the private sector can do it better and more efficiently, why continue?

Over the past 12 months, our firm has supported the City of West Torrens in South Australia with their nursing home divestment, and similar processes are now taking place in the Cities of Bayswater and Canning in Western Australia. In October, the Port Augusta City Council in South Australia announced the sale of its two nursing homes by public tender.

All of these organisations did some serious soul searching and concluded that the market had changed and so should their role. Under the Living Longer, Living Better reforms introduced in 2012, consumers will be in a position to demand more responsive, cost effective and innovative services.

In this environment, organisations that are created to deliver on this objective will be better placed than those which must manage a myriad of services. As a result, we can expect the representation of local government in the aged care sector to decline further in future years.

However, the role of local government in planning facilitation is absolutely critical. The Georges River Council in New South Wales recognised the importance of promoting aged care development in their communities. They have preserved a prime piece of real estate in Oatley for the provision of aged care services. The City of Swan in Western Australia has made similar allocations, recognising the need for greater services levels in their municipality.

Our consultation with aged care and retirement village operators revealed a high level of frustration in relation to the planning approval process for new and expanded developments. The importance placed on seniors’ accommodation and aged care services varies substantially between local government agencies and planning authorities.

Across Australia, seniors’ housing and aged care projects have been stalled or terminated because of misunderstanding and prejudices among community members. While some of this sentiment can be attributed to a natural fear of ageing, others misconceive that the expansion of seniors’ accommodation results in an influx of ageing people in their community.

In fact, the opposite is true. The provision of age appropriate accommodation makes larger homes available for young families, while helping the elderly remain in their own community. 

By 2020, around eight million Australians will be aged over 70 years. This cohort currently owns around 21 per cent of all residences and almost 90 per cent of these seniors have surplus capacity within their homes. In the absence of appropriate planning and investment in suitable housing and community infrastructure for seniors, this demographic shift will have a major negative impact on housing affordability and the wider economy.

The local government participation and facilitation of the planning process will be critical to addressing this emerging issue.

Australia’s not-for-profit aged care peak bodies have outlined nine principles that should underpin the new financial model being developed as an alternative to the existing Aged Care Funding Instrument.

As Australian Ageing Agenda reported first reported in October, the Department of Health has commissioned the University of Wollongong to identify alternatives to ACFI.

The university’s work will include a review of international models, as well as methods used in related sectors such as the health and hospital system.

The seven NFP peak bodies said that the recent funding changes and court challenges have “highlighted the urgent need for a more sustainable, efficient and effective model to fund aged care services.”

The new funding model should be underpinned by principles that enable equitable access to high quality care, support consumer choice and control, maximise health and wellbeing and support reablement and preventative approaches, the groups said.

“Funding should support all consumers based on their assessed needs, and ensure that all consumer groups, including CALD, LGBTI, indigenous Australians, older people living with disability, people suffering mental ill health or those who may be socially or geographically isolated, have access to appropriate support, care and services as they require them.

“The model should also be flexible and adaptable across the continuum of care (home care and support through to residential care). It should be efficient, transparent and financially sustainable. It should encourage, not stifle, innovation, investment and growth,” the peaks said.

NFP aged care providers deliver about 60 per cent of residential aged care services and 85 per cent of all community aged care services in Australia.

This story first appeared in Australian Ageing Agenda.