The Commonwealth Government has announced an increase to aged care funding through its redirection of the Labor Government’s $1.5b Workforce Supplement into general aged care funding, but at the same time slashed $653m from privately owned providers by axing the Payroll tax Supplement from 1 January 2015.

This tricky change to government funding policy seems like a quick-fix measure for budget savings without any real consideration being given to the purpose of the supplement.  Private aged care providers will now be at a distinct financial disadvantage to not-for-providers, who are exempt from the state tax.

As a result, private providers all over Australia will struggle to match not-for-profit in pay rates for staff and capital reinvestment.  The Coalition government has played favourites with not-for-profits and aged care is no longer a level playing field following this clear announcement of government policy.

Russell D. Egan, Company Director.