Home | Industry+Policy | Federal Budget 2016: The sector reacts

Federal Budget 2016: The sector reacts

The term mixed bag is often used by peak bodies when discussing how healthcare fares in each year’s Federal Budget and the 2016-17 showing is no different. Below, Aged Care Insite gets the lay of the land from some of the aged-care sector’s leaders and experts.


Aged & Community Services Australia (ACSA) found the Budget lacklustre for aged care.

The group welcomed the increased funding for MyAgedCare and improved targeting of the viability supplement for rural and remote areas, but said the most significant announcement was a downgrade in funding to counteract higher than anticipated growth in expenditure.

ACSA chief executive John Kelly said:

The Budget papers have predicted a ‘blow out’ in residential aged care subsidies of $3.8 billion over five years, with the Government clawing back $1.2 billion of this. This will leave aged care providers with $2.6 billion of the ‘over budget’ amount.

However, ACSA is concerned about how this will be clawed back. The MYEFO announcement in December 2015 announced a ‘saving’ of $472 million over four years by refining the funding instrument to tackle the higher than expected growth. While we were disappointed by this decision at the time we accepted it because it tackled only those who undertook ‘distortions’ in claiming. However, an across the board cut will penalise all aged care providers.”

A sting in the tail re ACFI is the decision to cut the indexation for Complex Health Care domain by 50 per cent. This will hit everyone who is a resident using Complex Health Care. This will impact not only on providers, but is a cut to the money available for care genuinely being provided to frail older people.”


The Heart Foundation applauded the Government for maintaining support of a significant increase in tobacco tax.

Heart Foundation Tobacco Control spokesperson Maurice Swanson said the legislation introduced in 2014 was a measure that would continue to save lives.

“Smoking is a major cause of cardiovascular disease, including heart attack, stroke and peripheral vascular disease, with around 15,000 people dying each year because they smoke,” Swanson said. “There is no safe level of exposure to tobacco smoke, with even a non-smoker’s risk of heart disease increased by up to 25-30% if they are exposed to second-hand smoke.


The Stroke Foundation said the Government has taken positive steps to reduce the nation’s stroke risk in the 2016 Federal Budget.

Stroke Foundation chief executive Sharon McGowan said the continuation of the tobacco tax and the health star rating system would help Australians make better choices when it came to their health.

McGowan said while the Foundation welcomes the positive steps the Government is taking to improve the state of chronic disease, much more can and must be done.

“A national integrated health check program would help people at risk avoid having a potentially deadly stroke – we need the Government’s support to deliver this lifesaving initiative,” she said.


Palliative Care Australia (PCA) has said while the Budget aims to put every health care dollar as close to the patient as possible, there aren’t many dollars to go around.

Chief executive Liz Callaghan said PCA is concerned that the Aged Care Funding Instrument (ACFI) has been significantly cut.

PCA said the Department of Health says the ACFI has experienced unanticipated growth in the complex health domain and as a result indexation will be halved leading to a reduction of funding of $1.2 billion.

Callaghan said use of the complex health domain is what most aged-care providers rely on to provide palliative care.

“PCA is concerned that residents in aged care will miss out on receiving high quality care at the end of life,” Callaghan said. “While we support being fiscally responsible, we call on the government to commit to closely monitoring the impact of this cut to ensure there is no reduction in the quality of care as a result of this cut.”

PCA again called for the introduction of quality of death audits.


Australian Healthcare and Hospitals Association (AHHA) chief executive Alison Verhoeven said:

The confirmation of an additional $2.9 billion over three years in public hospital funding is welcome, though this returns less than half of the expected funding that was initially removed by the Government in the 2014 Budget.

The AHHA strongly supports the ongoing commitment to activity-based funding, particularly given the National Health Performance Authority’s recent report has shown such funding improves hospital efficiency. However, the Government must continue to plan not just for the next electoral cycle, but with a strategic vision for the future of Australian health.

Action is needed to align the interfaces between health, aged care and disability services to help coordinate patient care. The limited arrangements proposed for Health Care Homes will only partly serve to address this.

Primary Health Networks require appropriate and long-term funding to carry out their core functions, with flexible funding to meet community needs. Under-resourcing organisations with ever-increasing responsibilities will compromise their ability to achieve their full potential and to deliver on the government’s health policy objectives.”


The Budget contains no new major policies or programs that would significantly improve the lives of Australian’s living with dementia and their carers, Alzheimer’s Australia has said.

Alzheimer’s Australia national chief executive Carol Bennett said: “At a time when dementia is the second leading cause of death and is projected to affect almost a million people by 2050 with significant economic and social costs to Australia, we need national investment to drive a co-ordinated approach from prevention through to cure.”

Bennett said perhaps the most positive outcome for people living with dementia is the continued support for dementia specific flexible funding. “This will enable some evidence based improvements in dementia support which is much needed,” Bennett said.


IRT Group chief executive Nieves Murray said the changes to the Aged Care Funding Instrument (ACFI) Complex Health Care claims will essentially make it harder for providers to claim for Complex Health Care.

Murray said: “Aged care providers recognise that as Australia’s population ages, the Government needs to ensure its aged care expenditure is sustainable over the long-term. However, in changing how it contributes to the cost of providing residential care, the Government should be careful not to erode the ability of providers to deliver high quality aged care to all those who need it.”

She added the good news is that some of the $1.2 billion in savings will be reinvested, including $102 million to help providers in rural and remote areas better manage cost pressures they face due to their isolation and small size, $136 million on the My Aged Care contact centre to meet increasing demand from consumers trying to navigate the system, and $10 million for unannounced compliance site visits of aged-care providers.


It is clear the Government is not prioritising prevention and has missed a significant opportunity to invest in the health and wellbeing of Australians.

This is the call from Public Health Association of Australia (PHAA) Vice President David Templeman.

PHAA said the bulk of funding focused on treatment and clinical services instead of prevention initiatives. Templeman said: “This budget is very treatment focussed. We must shift to a model which focuses on prevention rather than waiting for someone to become sick and relying on healthcare and hospital services.”


The $2.9 billion being promised in the Budget for health is akin to putting a Band-Aid on a severed limb, the Australian Nursing and Midwifery Federation has said.

In the lead up to the Budget announcements, the ANMF called on the Turnbull Government to “begin restoring the $57 billion cut from national health funding under previous Prime Minister Tony Abbott”.

Acting federal secretary of the ANMF Annie Butler said the $2.9 billion being promised in the Budget for health won’t go anywhere near ensuring that the States and Territories’ hospitals can operate effectively and efficiently.


An additional $1.2 billion cuts to direct care services reveals the Turnbull Government and Minister for Health and Aged Care Sussan Ley are in denial about the true cost of providing complex care to Australian seniors.

That’s according to Leading Age Services Australia (LASA), which said the move comes on top of $1.9 billion in cuts to aged-care services since the 2014-15 Federal Budget.

LASA spokesperson Beth Cameron said the sector is already experiencing financial difficulties, with about 38 per cent of aged-care providers currently deemed financially unviable.


The Budget delivered some great measures around superannuation but missed opportunities in aged care, housing and mature age, COTA has said.

COTA Australia chief executive Ian Yates said he welcomed the initiatives that put superannuation back on the path for which it was originally intended but added older Australians will be disappointed that the next steps in aged-care reform had been left out of the Budget, with no timeframe for ensuring people can access the aged care they need, when they need it.

Click here to read more.

Do you have an idea for a story?
Email [email protected]

Get the news delivered straight to your inbox

Receive the top stories in our weekly newsletter Sign up now