Aged and Community Services Australia (ACSA) initially welcomed reforms announced earlier this month, but now say closer inspection has revealed significant problems.
The Government said its package, which includes 7200 more in-home care places, increased funding to high level residential care and the ability to charge new residents higher fees, was designed to make aged care fairer and more affordable for Australia's ageing population.
ACSA, which represents more than 1200 community-based aged care providers, initially described the measures as "a welcome boost to an industry under strain".
But ACSA CEO Greg Mundy today said the package would not resolve the longstanding problem of providers struggling to raise capital for new facilities, and could make some low-care providers worse off.
"We were initially very pleased with the package but as more detail became available on the various offsets and trade offs contained within it, it became clear that the gains were modest and that there were significant negative impacts," Mr Mundy said.
Mr Mundy said funding for high care nursing homes had been tight for many years as costs had risen faster than government subsidies and fees from residents.
The new funding package tried to address this problem but was premised on unrealistically low building costs, he said.
"Our members around Australia experience costs of construction 17 to 40 per cent higher than those assumed in the funding package," Mr Mundy said.
And because a number of existing subsidies and residents fees would be changed or abolished, some low care services could actually lose money, he said.
"Some may be able to recoup this by raising the value of bonds they charge to incoming residents, others, including those in rural Australia or less affluent parts of urban areas will just go backwards," he said.
"We have raised our concerns with Government over the past two weeks, and will continue to work with them to find solutions."
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