Australia’s ageing reckoning – the Support at Home shambles and bed build obstacles: two fault-Lines the reform agenda keeps ignoring

With waitlists growing, construction slowing, and confidence falling, advocates are calling for a bold reset in how the nation plans for care.

Industry leaders and experts remain confused and increasingly frustrated as to why reform has not been shaped early to meet the growing demand coming to the health and aged care sectors. Experts and advocates are firm, in order to safeguard the sustainability of both the health and aged care sectors, preventative measures must be heavily invested in. Reform in a functional and fair Support at Home will be central to preventing hospital and RAC collapse.

As Juniper’s CEO has repeatedly articulated, investing in accessible, timely, comprehensive in-home care will mean substantial benefits, not just to the lives of seniors staying at home longer and healthier, but to the coffers of a nation. With the new Support at Home waitlists ballooning and worries over the co-payment model, experts and advocates are reaching a fever-pitch of alarm to call for reform. Reform too must be overhauled to provide grounds for providers to break ground and rise the bed build rate. 

The two fault-lines must be grappled with, preventative care measures such as Support at Home must work and providers must be supported to build beds. Then Australia’s aged care future has a chance.

Fault-line one – support at home must work

From ballooning wait-lists and frightening projections for co-payments, the Support at Home program has received insightful critique from all sources of aged care.

Juniper’s CEO, Russell Bricknell has been campaigning in WA, not only for more Support at Home packages per capita but for the true benefit of in-home support to be seen for what it is; A tremendous and sustainable cost saving opportunity and life-affirming approach to senior health care.

With hospital daily costs reaching over $3000 a day, the issue of seniors being stuck in hospital is not only in-humane it is wasteful of taxpayer money.

The Support at Home program needs not just a reform shift but an attitude one as well. If the issue of wait-times and delays is dealt with, if the issue of co-payments is overhauled to prevent budget shocks and terrible choices for seniors, then a system by which preventative measures can start to be felt not in supporting some of Australia’s most vulnerable but the cost and strain of care across sectors overall, will be significant.

If seniors are supported to have a shower and go to the GP, advocates and clinical professionals see overall health improving and being maintained for longer, keeping seniors out of hospital and RAC. GPs as well have been campaigning for greater access, particularly in subsidising longer appoints, to deal with higher complexity to help reduce the strain on seniors presenting to hospital.

Current reform, in preparing for the future needs of Australia’s seniors must shift its gaze to preventative measures. Keeping seniors out of hospital. Keeping seniors at home longer and healthier is not only centering care in dignity and human beings, it is safeguarding the pillars of Australia’s hospitals and RAC to be free to manage only those that truly need to be there.

Support at Home, must be seen as an investment that will yield beneficial results both human and financial, and help mitigate the high demand that is unavoidable in the years and decades to come.

Fault-line two – supporting rac to build

RAC – where we are

While the numbers slightly differ between actuarial projections a common theme remains. The numbers are large. Equity group, livewire, projects that as the initial wave of boomers are now reaching the 80-year mark, research and precedent suggests they will start to enter RAC rapidly from this decade onwards.

According to government 2024 figures, there were around 225,000 RAC beds in operation in Australia. But equally as important to acknowledge in reality is that the number of providers that are profitable sits, also according to government data, around the 68% mark. Coupled with the ubiquitously felt rising operational costs, economists see the eddy of factors placing, as livewire has calculated, net new bed supply growth stalling to just over 1% per annum. This is decidedly under the rate needed to meet projected need.

Reform for rac – what we’ll need

Livewire predicts that Australians aged over 85+ will rapidly rise from 565,000 in 2023 to 958,000 in 2034. From these figures it is estimated that RAC will need roughly 350,000 beds to meet demand. The increase from now to 2034 is such that 130,000 net new beds or 13,000 each year over the next decade will be warranted. This rate of build far outstrips the 1-1.5% net new beds rate of building that was calculated between 2021 and 2024.

Reform to support builds

With the volley of blame and messaging between government and state health ministers over the situation of seniors stuck in hospital with nowhere to go, the issue of beds builds has come to the fore. With Minister Butler stating he, “recognised their frustration that the aged care sector is not building the beds at a pace we need them, and we need to do more to make sure that happens.”

It is exactly this “we need to do more” that providers leaders are looking for. Frank Price of RBFI believes there are clear and immediate opportunities for government reform to support the building of beds now, as well as acknowledge the reality of financial and operational costs that providers operate within.

“From a fairness perspective, providers are obligated to comply with legislation and deliver services that meet the needs and aspirations of older Australians—not to build capacity.”

To Butler’s, “We know we need to build enormous numbers of new facilities to accommodate the ageing of the baby boomer generation… but they’re not happening in the numbers we need right now, today”, Price finds some understanding.

He sees this as, “suggest[ing] the Minister understands that the responsibility for building capacity lies with the Commonwealth.”

Bold reform will be warranted to kick-start build rates. Price states, “I would encourage the government to develop policies that support providers with the cost of new builds, streamline the time it takes to ‘turn the sod’, and designate land exclusively for aged care to reduce competition with developers.”

Cost borne by residents

Some hedge in their frustration that if the banking sector was seeing only 68% profitability then perhaps the government would be more likely to somersault to provide growth reform. The fact that the aged care sector sits at this rate is of significant frustration across aged care heads and boards.

Price also reminds of the reality of the build source, “Unless a provider receives a government grant, the cost of building aged care facilities is primarily borne by residents.”

In the very makeup of operational funding models, Price highlights the tension between wanting to provide the utmost in care and needing to cover costs without undue burden on residents.

“Those paying DAP or RAD effectively cross-subsidise the inadequate accommodation supplement, which is capped at $70.94 per day.” Where providers want to deliver care above a 3-star level, “funding is calibrated to a 3-star level, and any staffing above that is paid for by the provider.”

Construction costs

Price advocates the government must firmly acknowledge and pivot reform to encompass the soaring construction costs felt across the nation, aged care build projects are not immune.

“Construction costs began to spike in late 2020. Previously, the average cost per bed was around $350,000. Today, it’s closer to $640,000—driven by increased labour and material costs, builder availability, and delays in DA approvals.”

For areas where supply chains and distances exacerbate builds, the situation worsens, “rural and remote locations face even higher costs, often exceeding the RAD that can reasonably be charged, leaving providers to fund the shortfall.”

In a nation where internally we are known for eye-watering land costs, the obstacle to building worsens, “Importantly, this figure excludes land costs. Unless providers have access to legacy landbanks, the total cost per bed—including land—is approaching $1 million.”

Avoiding further debt

As evident to the majority of provider leadership, the cost of building is significant, with providers struggling to cover functioning costs across facilities, the financial lift to also cover build costs strays into the impossibility. Hedged into this corner as Price notes, many providers have only the option to borrow to financially underpin the possibility to build.

“If RFBI were required to hold the prescribed level of liquid funds, rebuilding one of our older homes would necessitate borrowing—incurring interest and placing additional pressure on project viability.”

“This is a significant concern for providers seeking to invest in new infrastructure.”

The sector wants to build

Price shares sentiment felt across industry leaders, the wish to build is fervent and sincere. It is worthwhile for government to acknowledge dampening factors, in shaping reform to unlock build rates.

“Escalating construction costs over the past five years, competition with deep-pocketed developers for land and lengthy and costly DA approval processes”, are all substantial obstacles to lifting to reach the significant figure of 13,000 beds per annum.

Price hedges, ““Mandating aged care-inclusive development zones across Commonwealth, State, and Local levels, offering capital grants to offset build costs and streamlining planning approvals to reduce delays”, are all immediate measures Federal and State governments can pivot towards to underpin their messaging of doing more to support beds being built.

The two fault lines must be met in policy

Australia is a wealthy nation with options; Reform must shift its gaze to preventative measures to help ease the growing pressure on hospitals and RAC. Support at Home must be financially viable for seniors for decades to come, to be able to stay healthier at home longer, so that pressure eases on the RAC as it builds. The government can no longer ignore the factors suppressing building rates, land, construction and development policy reform must meet the sincere desire of providers to build. 

Experts are clear, it is in preventative measures, to keep seniors healthier for longer in their homes, and supporting providers to build without going bust, that a sustainable future may be carved out for both the healthcare and aged care sectors.