Senate Community Affairs Legislation Committee, , 1:01:37 to 1:16:34
Analysis of net growth in operational aged care beds and the $1.7 billion funding package designed to deliver 5,000 additional places.
Topics: Health, Infrastructure, Government spending
Speakers: Senator The Hon Anne Ruston, Mr Luke Mansfield, Mr Daen Dorazio, Mr Blair Comley, Senator Ellie Whiteaker
Um just wondering how many new residential age care beds were built in 25-26? And and maybe Secretary, if Mr. Pew could let us know when he has that information, and I'll continue my questioning.
Just to be helpful, Senator, are there any other particular dates that you would be interested in so that we can make sure we have those at hand?
The dates are all very, very important to me. So if somebody who actually has got a grasp of the timeline of everything that's been occurring during this period in relation to this matter, that would be really helpful.
No, I understand that. What I'm saying is you've asked for a question of when the draft report was provided to the ministers. We've undertaken to get that. Is there another particular other type of dates that you'd be interested in?
I've got lots of dates that I want to ask you in relation to the IAT. And the Ombudsman's recommendations.
Good morning, Senator Luke Mansfield, First Assistant Secretary Access Dementia and First Nations division. Can I just check you were asking for the total bed numbers that have increased in the 25-26 years?
Yes, so I'm keen to know in out and total.
So there was an net growth of 1,672 beds in or places in residential aged care in 25-26.
And how many were in, how many were out? I'm assuming that there were more than that delivered because some may have gone offline.
Let me see if I can tell you that figure, Senator. I may need to take that on notice. I've got the net figure, but not the ons and offs. I'll come back on that.
Um how many of how many of those beds that's the net 1,672 are operational
Sorry?
How many of those 1672 beds are operational now?
Um that's the net growth in operational places.
So they're operational, yeah, as opposed to builds.
So that it means that the total number of uh operational places as at um 30 June uh 2026 was 226,165. Sorry.
And how many beds in total do we have? If you're that there, the operational beds. How many beds um are currently not operational?
I will check that and come back to you, Senator.
Okay. Um in a report. Um there have been a number of reports, including um the Minister saying that there would be an incentive for 5,000 new beds to be built as a result of um policy changes by the government. I'm just wondering if you were aware of subsequent media stories saying that approximately between 3,000 and 4,000 planned beds are being reported as being cancelled or not proceeding to build or delayed as a result of an act changes. Are you aware of that?
Uh Senator, I might ask my uh colleague uh Mr.
Thank you, Senator. Uh Dane Durazio, uh First Assistant Secretary for residential care and markets. Yes, we are aware of those reports.
And is that figure um something that the Department believes is is is an accurate and fair reflection of the marketplace today?
Uh Senator, we've not been able to independently verify that number. We are aware of um when we have counted up um reports that have otherwise been shared with us by providers which show around about 1,500 beds that we believe may be delayed or or not proceeding, those are reports though, so it's hard to verify exactly.
And so in in terms of that sort of um analysis of the want of a better word, was that all on um subsequent to the an act determination for this year? Yeah, yep. Okay, thank you. Um I'm just keen to understand what your view now is as to what the net figure for the onlining of new beds is over the forward. Have you reprofiled what you think are likely to be new bed builds, net new bed builds over the forwards on the back of the changes that have occurred over the past 12 months or since your last budget?
Senator, it's probably worth just understanding some of the sort of time frames involved in beds coming online. So the the beds that are coming online over the last 12 months really reflect investment decisions that would have been made somewhere between three and seven years ago.
I totally understand that, Mr. Mansfield. And I think that it's a very fair comment. But I'm trying to understand. We the Minister made a very powerful statement that he believed that the um that funding that he was proposing was likely to be saved from a bill that has now been taken off the notice paper. Um that an expenditure was going to deliver 5,000 new beds. Um we've now seen subsequent to the ANAC changes that there are likely to be less beds in the pipeline into the future. And you said 1,500, even though the sector said somewhere between three and four thousand. I'm just wondering whether the department has done any reprofiling into the future, because I mean I understand a bed doesn't get built overnight. I don't quite understand that. But um what the profiling is into the future. Um have you done any reprofiling on the back of the changes that obviously have had an impact?
Um perhaps the way I'd answer it, Senator, is um we we do monitor the market dynamics and we do look at uh where capital investment is occurring. Um we the latest data that has come uh from sector uh data insights is that uh in residential age care construction projects underway. Uh it's expected that they would generate in the order of about four and a half thousand new beds in 26-27 and a similar slightly lower but similar number in 27-28. Of course, it's really important to understand that there are so many variables in construction that can impact construction numbers including availability of uh workforce and materials and uh those types of issues. Um but that's the data that has sort of come from ABS approvals data says that 264 building approvals across the sector in 25-26, which is consistent with the previous year and higher than the true preceding years. So I guess from a trends perspective, I would say, Senator, um the uh the the number of beds being built is has been increasing. Um as as you know, last estimates we talked about the the year previous was about 800 beds built. Um this year, 1600 beds. Beds built. And we're expecting that trend to continue to increase with the combination of investments that government has made and is making which of which there's been focus on ANAC, but there are many different elements of investment that are being made to help create and strengthen the investment environment to support future residential age care construction, including the 1.7 billion dollar package announced in 6.7 budget.
Okay, so can we maybe go to that? So you're saying that the $1.7 billion package announced in the 26-27 budget will result on your estimates, the construction of $5,000 additional age care beds. That's the modelling around that $5,000, that $1.7 billion, is that correct?
So that's correct. And I just to sort of put that $5,000 in context, that is once the changes have fully flowed through the system, as Mr. Mansfield just noted, the time lags are relatively long.
Yep. Understand that. So does the 1.7 billion dollars measure actually fund the construction of the beds? How does the 1.7 translate into 5,000 beds?
So it it does a couple of things. Sorry, the base level of the accommodation supplement.
The supported supplement.
Yep.
So that's the $5 and the $15 and the $20.
So it's and reprofiling the higher accommodation supplement on top of that? And in addition, there are new capital subsidies of $30 per supported bed or $15 for supported bed for a expansion of an existing facility that come online from the United States.
So is any of that gone out the door yet? Well, I mean the $5 hasn't even come into effect yet, has it?
The $5 comes into effect in March 2027?
Yep.
The $30 increase. So then the new $30 per bed capital subsidy takes effect from 1 January, and we're going to open applications for that in December.
So for the share the call in the 10 years. So for the 1 January, the $30 the $30 for the 1 January, is that for new builds that are come on at that point in time? Or what is somebody's about to open their doors?
Yeah, so we've put what we effectively call a census date on that. So it's for anything that's new that's opened since the new act commenced on 1 November 2025. So we're not back paying if you like, but if you have a bed that's come online since 1 November, you would receive that that additional subsidy. So we're very conscious that the last thing we would want to do is encourage a provider to delay opening a bed in order to receive that that new subsidy. So hence hence that setting.
So can I just ask you just finally, and I'll hand back to the chair, of the 1.7 billion, how much is this grants and how much of it is going into the supporter residence sub increase?
The changes in the umsidies. Sorry, the changes to the accommodation supplement, so the regular subsidy payments are approximately 1.1 billion over the forward estimates. So that's the number from budget time. The the targeted capital subsidies, so the $30, $15 arrangement, that's $348 million over the forward estimates.
Sorry. The targeted sub deeds are $30, the $15 and the $5?
Yep.
Is that not what is going on to the supported resident accommodation payment?
That is in addition to the Yeah.
So I'm trying to understand what you're paying some in the additional accommodation supplement payment for supported residents. And you're paying some in grant funding. So what is the 1.1?
The $1.1 is the changes to the accommodation supplements.
Which is the $515 and 30?
No, it is the five and the changes to the tiers of the higher accommodation supplement that is paid over and above the five. So the structure of the 40%. Sorry?
The f the 40%?
So when you say the 40%, are you referring to the process?
No, so what additional payments you've got to supported residents there are either under the 40% or over the 40% in terms of their subsidy, what the amount that the government pays for that supported resident. That is a for a resident who is in an existing refurbished accommodation, that would be $5 from March. Or if it's a super refurbished, it will be $15, or if it's a new build, it's $30. Is that what you're talking about?
So there is a there are different tiers of the accommodation supplement. I I wonder if it's better for us to just provide you with this in a table, Senator, because it's a fairly complex matrix of numbers.
Okay, so that's the $1.1 billion?
Yeah.
And what's the other $600 billion $600 million?
So the other six amounts, though the changes to the new capital subsidies, which are the $30 per resident for supported resident for a new build.
So there are no grants. It's just subsidies.
They're additional payment. Those are $348.4 million over the forward estimates. And now and the remainder of the $1.7 is $224.3 million for the new specialist dementia care units which are also in residential settings.
Okay, right. Okay.
I'm going to share the call to Yeah, okay.
I can come back to it.
Yep, we'll come back to this. Excellent. Okay, we have it. Senator Ullman Payne joining us by video conference. Over to you, Senator Allman Payne.