MARKET REPORT SUMMARY III. RISKS AND UNCERTAINTIES There are uncertainties around the long-term projections of aged care spending. Many interrelated factors will determine aggregate spending, including developments in labour productivity and wages in the sector, demand and consumer preferences. Technological improvements in the delivery of care have the potential to reduce cost pressures in the system. The ability of aged care providers – both inhome and residential – to leverage these improvements to provide cost-effective models of care will be a key determinant of the extent to which these advancements place downward pressure on government spending over the long term. The stronger governance and higher regulation on the quality of care has causes an increase in the operating expenditure and resulted lower profit margin of the operators. Only those operators that have a sizeable size with economies of scale will be able to continue to perform. Technological improvements in the delivery of care have the potential to reduce cost pressures in the system (Extracted from 2021 Australian Government Intergenerational Report & Ninth Report on the Funding and Financing of the Aged Care Industry) CORPORATE OVERVIEW STRATEGIC PERFORMANCE THE DRIVING FORCES SUSTAINABILITY STATEMENT 063 GOVERNANCE STRUCTURE FINANCIAL REPORTS
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