Treasurer’s staff scrambles for aged-care fund details
The Australian 12:00am September 18, 2018
Rick Morton
EXCLUSIVE The Treasurer’s office has sought urgent advice from two government ministers about whether the Coalition cut $2 billion from direct aged-care funding and the dementia supplement, almost a week after cabinet signed off on a royal commission into aged care.
On Sunday night, five hours after Scott Morrison was asked about cutting the Aged Care Funding Instrument, an email from Josh Frydenberg’s office was sent to Health Minister Greg Hunt and Aged Care Minister Ken Wyatt’s advisers seeking more answers.
The Australian can reveal the Coalition has been considering a review of the ACFI, which would save between $3.3bn and $5.4bn over four years on top of the $2bn shaved off in 2015 and 2016 when Mr Morrison was treasurer.
However, new Treasurer Mr Frydenberg was not across the detail of that policy, even after reading the government’s release.
“A couple of questions from today’s announcement,” a Frydenberg staffer wrote on Sunday night. “Bill Shorten claims Scott Morrison cut $2 billion in aged care funding. Is this correct? What’s our best response?”
The staffer asked how much aged-care workers were paid and whether “the government cut the dementia supplement?” “We’ve had a look over the TPs (talking points) and media release but these are futher (sic) questions from the Treasurer after looking at the material,” the email said.
The royal commission was signed off by cabinet last Monday night. Six days later it appeared the Coalition had yet to work out its own record on aged-care funding.
The ACFI review — which was completed last year and put on ice while another review is under way — said “funding volatility and the lack of predictability with the aged-care forward budget estimates” had been a crucial issue for both government and the sector.
“Consultations with representatives of the sector have supported the notion that the rate of the ACFI care-subsidy increases has been unsustainable and peak bodies agreed that some corrective action was needed. However, subsequent action by government to slow the growth have created uncertainty (e.g. will it happen again, soon?) producing a destabilised environment for aged care providers,” the ACFI review said.
The changes to the ACFI when Mr Morrison was treasurer — amended by Mr Wyatt while still saving $1.2bn — were made because the government determined some providers were overclaiming. The review attributed the rise in complex healthcare subsidy claims awarded under the ACFI to a “minor increase in frailty and care needs of new admissions” and to practices by some providers.
“New consultancy business models developed to maximise ACFI funding for the sector that focused on ‘no fee if no ACFI funding gain’,” it said. “These … models were successful at significantly improving average ACFI funding levels, particularly with existing residents who had not been reappraised for some time.”
This review and another, the Wollongong Report on the Cost of Care, and will sit on the back burner until December while the government awaits a Resource Utilisation and Classification Study to help provide an “evidence base” for how much care costs and how much government should fund.