Aged-care Spending Surge Likely
The Age
Tuesday October 31, 2000
CANBERRA
Spending on nursing homes, meals on wheels and other aged-care services would surge by about $8.5 billion a year by 2031, according to a report to be released today.
To pay for the projected boom in spending, estimated to be greater than 145 per cent, ``a considerable diversion of resources" would be required, according to researchers from the Productivity Commission.
The analysis suggests the increase in aged-care spending is likely to be most apparent after 2011, when the postwar baby boomers require greater care.
The report, Long-term Aged Care: Expenditure Trends and Projections, says aged-care spending is projected to rise from 1.01per cent of GDP (in 1997) to about 1.38 per cent by 2031.
But it suggests Australia should be well placed to pay for the extra costs associated with an ageing population, and does not face the aged-care time bomb predicted by some economic commentators. On recent economic performance, GDP growth will significantly help the country's ability to pay for aged-care services, the report says.
It also says the elderly of future decades will be wealthier than the elderly today, increasing the likelihood they will pay for their own care, rather than taxpayers.
But it says the impact of a wealthier society could be unclear. Wealthier elderly people are likely to have a higher demand for aged-care services, the report says.
A spokeswoman for Aged Care Minister Bronwyn Bishop said the government was planning to meet future aged-care needs. The National Strategy for an Ageing Australia was planning for the next 50 years.
``Residential aged-care expenditure has increased from $2.5billion in Labor's last budget, 1995-96, to $3.9billion in the year 2000-01," the spokeswoman said.
Opposition aged-care spokesman Chris Evans criticised the government on aged-care planning.
``This government has not put forward a strategic plan for aged care and has failed to plan for the demands of our ageing population," he said.
``As a result, there are nursing-home shortages in many regions and waiting times are growing."
The report said Australia's private and public expenditure on aged care was $5.84 billion in 1996-97. It estimates the total will jump to about $14.3 billion in 2030-31.
By 2031 people over 65 are expected to be about 22 per cent of the total population, compared with 12 per cent in 1997.
© 2000 The Age