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Letter to Greg Hunt MP concerning aged care funding for COVID-19

Dear Minister Hunt,

I write in respect to the Government’s announcement of an additional $101.2m funding to aged care providers to assist manage COVID-19 in residential care services.

In 2019, the Government provided $320m to the residential care sector to assist with managing the costs of the Royal Commission into Aged Care.

Respectfully, I would submit that the additional costs to aged care providers of managing an unprecedented virus outbreak are far greater than the costs of the Royal Commission by many times. The vast majority of aged care providers have not been directly affected the Royal Commission proceedings (aside from the initial survey request) and ongoing directive improve quality such as in the Royal Commission interim report.

Preventing, managing and containing the COVID-19 outbreak in aged care involves significant additional costs by way of:

  • extra staffing to maintain quarantine and hygiene;
  • potential staffing shortages and agency staffing costs or overtime;
  • elevated sick leave expense;
  • higher consumption of chemicals, drugs and materials (paper, soaps, protective
    equipment and disposable products);
  • reporting commitments;
  • with increasing mortality, lower occupancy levels;
  • additional training costs;
  • should the outbreak worsen in the community there will be shortages and price
    impacts for supplies to aged care services.

Aged care providers have substantial capital and risk committed to delivering an essential service on behalf of the Commonwealth and we have no way of passing these additional costs onto customers.

I request you significantly increase the additional funding to providers to help us achieve this public health objective whilst preserving viability of a sector which is already on the verge of total collapse (as is evidenced by the 56% of providers already operating at a loss due the Coalition’s previous cuts to aged care funding).

The government cannot risk a total aged care system failure. This will result in the hospital system being overloaded unnecessarily and frail, elderly Australians being exposed to the virus in the greater community.


Russell D. Egan
CEO