Former Deputy Chair of the Productivity Commission has told the Royal Commission it is “absolute madness” to have taxpayer funded aged care for those who can afford to pay for their own care through their assets.
Professor Michael Woods was the first witness to appear in front of the Commission in the second of seven days of hearings into the sector’s funding and financial viability.
Professor Woods said the family home had largely been protected from aged care supports means test, and those who could afford to pay more for subsidised services they consume, should.
“It’s absolute madness to have the taxpayer, just because a person has got old, suddenly paying for all of these things,” Woods told the commission.
Professor Woods was asked by Senior Counsel Assisting Peter Gray QC if there was any merit in a social security-like aged care scheme, similar to compulsory super.
But Professor Woods said such a scheme would bring too many uncertainties.
“What if they still have a partner who can help them? Who pays for those who can’t make the mandatory payment – is it the taxpayer? You are not only are paying your contribution now as a working person, but also paying taxes for (others). I just think there are too many uncertainties and that there is no net gain.”
Professor Woods was followed by Professor Naoki Ikegami from the Graduate School of Public Health, St Luke’s International University. Professor Ikegami explained Japan’s system of long-term insurance.
Professor Michael Sherris from the Univeristy of New South Wales was next to the (virtual) stand, with the discussion focused mostly on life annuities.
And the session was rounded out with evidence from economist Professor John Piggott AO.
Today’s hearing will feature a number of eagerly anticipated witnesses including former Federal Treasurer Peter Costello and Former Treasury Secretary Dr Ken Henry.
As always, we’ve covered the full day of hearings in-depth in our newsletter The Daily COMMISSION with Lauren Broomham.
