RMIT ABC Fact Check
Bill Shorten’s claim on aged-care funding was, once again, found to be misleading. (ABC News: Matt Roberts)
Weeks out from the federal election, Labor has again attempted to turn the blowtorch back on the Government over cuts to aged-care funding.
In a recent press conference, Opposition Leader Bill Shorten said: “What’s really scary is this Government’s cut nearly $2 billion from aged-care services.”
Is that right? Has the Government cut nearly $2 billion from aged care services?
RMIT ABC Fact Check investigates.
Mr Shorten’s claim is misleading.
Last year, Fact Check examined a similar claim by Mr Shorten, in which he accused the Government of cutting $1.2 billion from aged care.
Our analysis and conclusions have not changed.
In the 2016-17 budget, the Government decided to pare out $1.2 billion of “efficiencies” over four years, largely by reducing the subsidies paid to aged-care providers to tackle potential over-claiming and an unexpected cost blowout.
That came on the heels of savings of $472 million announced in the December 2015 mid-year budget update.
Despite these “efficiencies”, the overall level of Commonwealth funding provided for aged care has increased on an annual basis for at least the past decade.
The 2015-16 and 2016-17 financial years were no exception.
As experts have noted, this is hardly surprising, with Australia’s ageing population leading to growing numbers of aged-care recipients, increased care requirements, and higher care costs.
According to Fact Check’s analysis, funding has consistently increased across a range of indicators: in nominal dollar amounts; in real terms (after adjusting for inflation); as a proportion of total expenses; and as a dollar amount per aged-care resident per day.
Fact Check does not consider an adjustment to the growth in future spending to represent a “cut” when the overall level of spending continues to rise.
Below is an updated summary of Fact Check’s previous findings.
Government spending on aged care
Fact Check analysed budget papers from 2009-10 to 2018-19.
Excluding spending on the aged pension, some concessions and other forms of income support — but including spending on residential care, home care and veterans’ care (among other things) — spending increased at an annual average pace of about $1 billion between 2010-11 and 2017-18.
If the latest budget forecasts for the years 2018-19 to 2020-21 are included, the annual average increase rises to about $1.1 billion.
What about aged-care spending after factoring in rising prices?
If prices generally have been rising more rapidly than government spending on aged care, it is possible that spending has fallen in real terms, leading to a fall in the level of services provided.
Fact Check used the Australian Bureau of Statistics’ Consumer Price Index to calculate a “real” measure of spending on aged care, expressed in 2016-17 prices.
This showed that real spending has been rising steadily, although at a slower pace than the nominal figures would suggest.
As experts noted, it is unsurprising that Government spending on aged care would rise at a rate outstripping general price rises, given cost pressures linked to the ageing of the population.
In 2016-17, the year referred to by Mr Shorten, real spending grew by $834 million or 5 per cent.
Aged-care spending as a proportion of total spending
Fact Check also examined Commonwealth spending on aged care as a proportion of total spending.
By this measure, aged-care spending also increased, from 3.05 per cent of total spending in 2009-10 to 3.93 per cent in 2017-18.
ABC stories on aged care
What about spending per aged-care resident?
Data on Commonwealth spending per aged care resident per day is provided by the Department of Health in its annual report on the funding and financing of the aged-care sector.
The latest report (July 2018) shows that, in 2016-17, the Commonwealth spent an average of $184.06 per resident per day.
That was an increase of 6 per cent on the $173.57 spent per resident per day in 2015-16.
Principal researcher: Economics and finance editor, Josh Gordon