Abbotts added aged care burden could send providers to the wall

Shadow Minister for Ageing, Shayne Neumann, has called on the Government to come clean on what its cessation of the Aged Care Payroll Tax Supplement will mean for aged care providers across Australia.
In Senate Estimates yesterday the Assistant Minister for Social Services, Mitch Fifield, struggled to defend the scrapping of this supplement, which creates a level playing field by reimbursing approved for-profit aged care providers which pay the state-based tax from which the not-for-profit sector is exempted.
This is part of the Commonwealth’s principle of “competitive neutrality”, and has been in place since 1988.
When it came time to own up to this sudden change, Senator Fifield preferred to pass the buck, saying that “…the states and territories are responsible for their own tax base.
Furthermore, he refused to acknowledge that the process of seeking an exemption from individual state and territory governments from this tax added another layer of red-tape for providers.
“What Senator Fifield doesn’t seem to realise is that by scrapping this supplement the Abbott Government has signalled that aged care providers must bear an even larger burden,” Mr Neumann said.
“The government knew that this move would be met with alarm by providers, that it why it was kept secret and locked away until budget night.
“Essentially, Tony Abbott sprung this on the industry without any consultation, none at all.”
Mr Neumann expressed concerns about what the changes could mean for the availability and quality of aged care options in Australia, particularly given that the sector already operates at an average net profit before tax margin of just 5.6 per cent.
“What happens to providers in remote and regional areas who are just scraping by? If the axing of this supplement leads to some of them falling over, other providers may not be able to step in and take over.
“Older people in these areas will have to be moved into the public hospital system and the cost of providing a hospital bed is far more expensive than any aged care bed.”
Shadow Parliamentary Secretary for Aged Care, Helen Polley challenged Senator Fifield in Senate Estimates to reveal if he had considered the impact of this added burden on the sector.
“The Abbott Government’s cruel and heartless cuts have compromised the viability of the sector,” Senator Polley said.
“This amounts to a significant loss of revenue which could potentially lead to a shortfall of staff, skills and standards in an overworked industry.
“This quite simply could not come at a worse time. Right now, with the ageing Baby Boomer population reaching retirement, we need investment in aged care, not cuts.
“Many providers were planning huge investments in the sector in the coming years, but now this is in jeopardy. In fact, one company keen to invest in the sector has actually gone into trading halt whilst it digests just what this announcement could mean for its bottom line.
“I will do what the Minister and the Abbott Government has failed miserably to do – I will continue to speak with sector leaders and with Aged Care providers about their concerns. They deserve to be heard and the Government needs to take their concerns seriously.”
“Tony Abbott has chipped away at the margins, saving a penny here and a penny there but seemingly unconcerned about the long term sustainability of a sector that older Australians rely on.”