The recent release of a final report by the Royal Commission into Aged Care Quality and Safety has put forward 148 recommendations aimed at resolving troubles plaguing a sector in crisis. According to commissioners Lynelle Briggs and Tony Pagone, there should be an introduction of an aged care levy.
They suggested that an additional percentage of personal income tax should be dedicated to this. This could be in the form of a flat-rate levy that estimates place at about 2.61% for all. Or, a progressive levy that would see lower income brackets like those earning below $37,000 taxed about 2.1% with the rate increasing for higher incomes.
Pagone said the levy would go towards creating more stability and confidence in the future of aged care financing. He also expressed hopes that communities would have more interest in aged care and feel they had a greater stake in ensuring proper accountability.
Briggs on the other hand felt that the government should restore funding they had earlier cut that had led to the poor state of care. She however agreed introducing the levy could help raise the needed funding to institute the commission’s recommendations.
The National Seniors Australia advocacy group is supporting this move but advises “forensic” oversight to ensure the funds are appropriately spent and not just benefitting private providers. Other experts like Grattan Institute’s Health Program Director, Stephen Duckett, also support the idea of a new levy. Public support is likely given a recent survey of 10,000 taxpayers that showed 61% were willing to pay an extra 3.1% in tax to ensure all Australians have high-quality aged care.
PM Morrison’s reaction to this recommendation has been lukewarm. He said that the government was not inclined to increase levies and taxes. He also pointed out that other parties in parliament were also unlikely to support such a recommendation. Mr Morrison did however announce a $452 million additional funding for aged care as the report was being released.
Treasurer Frydenberg has similarly downplayed the likelihood of such a levy being introduced. He pointed out the coalition’s track record of cutting rather than raising taxes. He did however indicate that more spending on aged care would be forthcoming, though not where from.
However, the government is not quite on its own when it comes to discouraging the idea of an aged care levy. The Australian Taxpayers Alliance (ATA) is strongly against any such new health levies. According to their Policy Director, Emilie Dye, more government intervention would lead to increased bureaucracy and did not equal better care.
She also confirmed that Australia already has 125 separate taxes and that a better option would be to look at ways to curb government waste rather than increasing taxes, particularly on the younger demographic. She highlighted the current problems many Australians were facing as a result of lockdowns, including the loss of jobs.
The cabinet is expected to consider the royal commission’s report before deciding what adjustments to the funding of aged care will be included in the May federal budget.