Last week, the Productivity Commission released a new five-year report on how Australia can grow its economy and increase productivity. At more than 1,000 pages, it’s a mammoth read – but buried within its pages, there is a familiar message.

As I cover below, the report recommends a new visa class for overseas aged care workers to address the workforce shortages.

But the Productivity Commission also returns to a key point from its seminal 2011 ‘Caring for Older Australians’ report – that a re-balancing of funding between the taxpayer and consumers is needed to create a sustainable aged care funding model.

The reality is that while the Federal Government has committed to the 15% wage increase for aged care workers from 1 July, this figure alone won’t be enough to attract more workers into the sector.

At the same time, the growing demand for aged care workers and the financial challenges being faced by providers will only put more pressure on the public purse.

Add in an increasing national debt and a new $368 billion bill for submarines and the Government will continue to be constrained in the taxpayer funding it can allocate to aged care – unless it wants to raise a new tax, which would only further impact on productivity.

The Government knows that it needs to solve the workforce shortages in the aged care sector quickly to improve quality of care and ensure demand for care services is met.

This was a message confirmed by Aged Care Minister Anika Wells in her speech at our 2023 LEADERS SUMMIT the day before the report’s release – see the story here

The Minister promised to work together with aged care providers to address workforce shortfalls and tackle the reform agenda ahead.

“Together we will build an equitable, sustainable aged care system that can be trusted to take care of all people,” she told the audience.

“Be excited because for the first time in more than a decade, we really can be optimistic about aged care.”

Is this a sign that Plan B could be coming to a head sooner rather than later?