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Aussies willing to pay more tax to fund quality aged care

New research has found that 61 per cent of Australians would be willing to pay higher taxes to fund better quality aged care services.

Funding has long been a contentious issue in the aged care sector. The government's response to the royal commission findings pledged $17.7 billion to improve the sector, however many argue this isn't enough.

The royal commission recommended doubling our current expenditure in the short to medium term to meet the needs of Australia’s rising number of older people, and to implement substantial improvements in the quality and safety of aged care.

As it stands, 4 per cent of Australia’s income tax contributions are allocated to aged care.

The new study, commissioned by the Royal Commission and carried out by academics at Flinders University’s Caring Futures Institute, found that 61 per cent of current income taxpayers would be willing to pay an additional 1.4 per cent income tax per year to ensure universal access to good quality aged care.

And 55 per cent said they would be willing to pay an extra 3 per cent income tax a year to cover the aged care bill.

"Respondents with experience of aged care through a close family member were willing to pay more to guarantee universal access to satisfactory or high quality care compared with those without experience," the authors wrote.

Surprisingly, younger people were also willing to pay slightly more than older people to ensure universal access to satisfactory or high quality care.

However, the study's authors wrote that although increased tax contributions will be important to the future funding of aged care, they alone will not be sufficient to fund the sector due to the declining ratio of the working population compared with our older population.

"This ratio is continuously declining from 101 people of working age for every person aged 85 years or older in 1978 to 33 in 2018. By 2058, it is predicted that there will only be 15 people of working age for every person aged 85 years or older," they wrote. 

"It is therefore clear that there will be an increasing need for additional pillars of financial support beyond the current system, comprising income tax contributions as the major financial pillar supplemented by means‐tested personal co‐contributions and voluntary self‐funded contributions for extra services or supports."

They point to taxing superannuation earnings above a certain threshold, and private insurance as other potential ways to bolster the aged care coffers, but argue that something needs to be done soon.

"The current crisis facing aged care clearly demonstrates an urgent need for a national conversation. As a society, we need to take collective responsibility, building upon the foundations laid by our Australia‐wide survey to carefully consider all options for ensuring the quality, safety and sustainability of Australia’s aged care system for all Australians in need, now and into the future."

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