MARKET REPORT SUMMARY Chart: Australia Aged Care Spending 2020-21 2010-11 2030-31 2040-41 2060-61 2050-51 1.0 1.5 2.0 2.5 % of GDP % of GDP 0.5 1.0 1.5 2.0 2.5 0.5 Aged care spending is expected to increase substantially as a share of the economy, from 1.2 per cent of GDP in 2020/21 to 2.1 per cent of GDP in 2060/61 (or $113 billion in 2020-21 dollars). This reflects population growth and ageing, as the baby boomer generation enters aged care eligibility age and non-demographic factors. Real per person aged care spending is projected to increase from $5,460 to $12,500 for people aged 65 and over. Australia DRIVERS OF AGED CARE SPENDING I. TRANSFORMATION OF THE AGED CARE SECTOR The Government is making major reforms to the aged care sector that will occur in stages over many years. The Government has already made large investments to improve the safety and quality of residential aged care services and improve access through additional home care packages. Other initiatives will also improve workforce recruitment, retention, and quality in the aged care sector. The Government’s reforms to aged care will be underpinned by a new consumer-focused Aged Care Act, supported by strengthened governance arrangements. The role of the Independent Hospital Pricing Authority will also be expanded to help ensure that aged care costs are directly related to the care provided. These transformations cater to changing community expectations about how and where care is delivered, which will increase aged care costs. The Government response to the Final Report of the Royal Commission has accepted or accepted-in-principle 126 of the 148 recommendations. In addition, there are a further four recommendations where the Government supports an alternative approach to implementation. A small number of recommendations continue to be considered. CORPORATE OVERVIEW STRATEGIC PERFORMANCE THE DRIVING FORCES SUSTAINABILITY STATEMENT 061 GOVERNANCE STRUCTURE FINANCIAL REPORTS
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