Relying on funding boost alone is shortsighted – Rockpool CEO warns aged care rules are deterring bed builds

The government’s recent $3.7 billion towards aged care and bed building was a welcome advancement towards trying to meet the nation’s targets but as industry leaders have attested, it is not enough. The depth of thought towards policy overhaul must go deeper, industry heads say, if funding does not align with rules and the logistical hoops facing providers on the ground, new funding will be a mute and wasted opportunity. A warning elevated on a recent episode of the Time Well Spent podcast has re-ignited questions about whether Australia’s new aged care regulatory settings are unintentionally shutting new providers out of the residential care market at the worst possible time.

Analysts have been blunt, in order to meet the boomer wave cohort ageing into the aged care sector, 10,000 new beds per year are needed. Last year Australia was able to achieve a net gain of 800. The figures are a stark indicator of just how far need is from grounded results. Apart from funding challenges, Rockpool’s CEO outlines just how damaging current rules are when it comes to supporting providers in breaking ground for the desperately needed residential aged care places Australia’s seniors will, in increasing numbers, need.

Stuck before the starting line

In conversation with hosts Dane Mitchell and Rose Plater, Rockpool Residential Aged Care chief executive Melissa Argent has described what she believes is a serious fault-line in the avenue organisations pursue in trying to build new residential aged care homes under the government’s new regulatory framework.

Her concern is simple, but no less serious. In order to secure finance to build a new residential aged care home, Argent explains that banks typically require the operator to already hold registered provider status.

Yet under the nation’s new aged care laws, an organisation is prohibited to deliver Commonwealth-funded residential aged care unless it first becomes a registered provider through the Aged Care Quality and Safety Commission. That registration process sets a high bar, it requires providers to demonstrate governance capability, financial systems, operational readiness and compliance across multiple regulatory categories. As other heads attest, this is no simple feat.

The problem, Argent outlines, is that the obstacles for new entrants into the market, desperately needed to help fill the profoundly ambitious 10,000 new beds a year, start as soon as smart, innovative and solutions-oriented teams show up to start the work. She says that the government must note the reality new entrants face, many organisations cannot complete a major development project without debt finance.

And if lenders will not release that funding until provider registration is in place, new entrants may predominantly find themselves stuck before construction is even completed.

So the situation is, ‘damned if you do, and damned if you don’t’. The government dictates that in order to get registration approval, ground must be broken, the new beds must be built and operational readiness fully on display, and the banks stipulate that in order to get approval for the money required to break ground, for those new beds, provider registration must be in place. Industry leaders comment that this circular loop of absurdity remains in an worsening environment for the nation, particularly as seniors inappropriately continue to be ‘stranded’ in hospital without aged care spots to be discharged to.

“In order to get funding to build new residential aged care, you have to be a registered provider,” Argent said during the podcast.

And yet, “you can’t finish a project without having debt funding.”

For leaders in aged care, to front-line staff, to all those working in aged care development, showing up day-in and day-out in an industry that has seen more than its fair share of outside lambasting, the circular absurdity raises a key policy question to rival any white elephant in the industry.

If Australian figures blatantly indicate it needs more aged care beds, and advocates remind government these figures have been on display for decades, but the pathway to build beds is becoming harder for newcomers, who exactly will deliver the next generation of residential care?

How will Australia achieve its 10,000 beds a year? And who will pay the ultimate price if that figure is not met?

A system designed to improve quality blocks capacity

Emerging from Australia’s biggest aged care regulatory overhaul in decades, frustration has built from within aged care’s leadership as policy continues to miss landing reform that tackles issues on the ground.

The new Aged Care Act 2024 officially came into effect on 1 November 2025, replacing the old legislative framework and introducing a universal provider registration system.

Under the new model, any organisation seeking to deliver government-funded aged care services is required to be registered with the Aged Care Quality and Safety Commission. Existing providers were transitioned into the new framework through an automatic deeming process, but new entrants must go through the full application pathway, and the significant bureaucracy that entails.

The reforms were designed in response to the Royal Commission into Aged Care Quality and Safety, which found systemic failures across governance, accountability and care quality. Few in leadership within the sector disputed the need for stronger oversight for poor-performers.

The challenge that remains for aged care, that must be acknowledged, is the impediments to growth, investment and new projects for high-performers, particularly for new entrants. Aged care, like any sector, needs innovation and investment to thrive and grow, as Argent has elsewhere noted, profit must not be a ‘shameful’ or ‘ugly’ word. The balance of oversight to letting high-performers, in excellence and innovation bring fresh operational offerings to aged care is a good move for the sector.

According to Argent, the balance hasn’t been right with the new registration processes, that now, the new policy settings designed to protect residents may now be clashing with the commercial realities of building new infrastructure, directly resulting in an inability to protect residents, in foregoing the ability to provide beds for them when hundreds are ‘stranded’ in hospitals.

Rockpool’s unusual position

Rockpool’s experience means they have particular insight on the implications of the new registration policy.

The Queensland-based provider earned a reputation for premium residential aged care, over years from the ground up, opening four homes across south east Queensland before agreeing to sell its operating portfolio to Regis Healthcare.

The sale has allowed Rockpool to retain its brand, development sites and leadership team while recapitalising for a second growth undertaking.

However, due to Rockpool surrendering its provider status as part of the transaction, the organisation has had to undergo the comprehensive provider registration process despite retaining the majority of its executive, operational and development team from growth phase one.

Argent shared with the podcast team that Rockpool currently has a partially completed project at Hamilton North Shore, but due to the provider registration reset, it has encountered serious complications with financing arrangements.

“We’ve got a half-built home at Hamilton North Shore,” she shared.

“Under bank policy, we should have that registered provider status, but I’ve got to go through a full reapplication.”

Rockpool, she indicated, has managed to keep construction moving due to rapport, trust and longstanding relationships with lenders who have already experienced the organisation’s track record.

Argent questions what would happen to a genuinely new operator without that history.

“What would you do if you didn’t have a relationship with the bank that knew what we’ve achieved in the past?”

Impeding vulnerabilities into the process for new entrants to succeed in aged care, has the potential for prolific wider impact experts say, as Australia’s hundreds of thousands of boomers enter into a system far beneath the capacity needed.

A bed shortage that already on the back foot

The timing was decades ago, to be ready for Australia’s residential aged care demand, advocates and industry leaders say.

As it is, Australia’s aged care sector is already under significant pressure to raise residential capacity as a growing proportion of the population ages.

Government reforms have shifted residential aged care places away from provider allocations and attached them directly to older Australians, creating a more consumer-driven market and theoretically encouraging competition and expansion.

But many providers argue the infrastructure pipeline is not keeping pace with demand.

State health systems are already feeling the consequences, with hospitals in multiple jurisdictions reporting growing numbers of older patients medically ready for discharge but unable to access residential care due to bed shortages.

In New South Wales alone, recent reports from within government exhibit stark figures, the number of hospital patients waiting for aged care placements has risen sharply year on year, putting further strain on already crowded hospital systems. 2023 saw 300 seniors remaining in hospital when they were fit for discharge. Last year, that number rose to 766 seniors in a care setting that is entirely inappropriate, undignified and profoundly costly.

Argent says creating barriers to new providers entering the market risks making the problem worse, “we’re in a bed crisis now. We need more people to enter the market.”

That concern is not an isolated one among aged care leaders, developers too have warned that construction costs, higher interest rates, labour shortages and increasing compliance requirements are already making residential aged care projects more difficult to finance.

If provider registration becomes another barrier, many fear fewer organisations will even attempt to enter the market, placing further strain on providers already on the back foot.

The role of the banks

One of Argent’s strongest critiques is directed at what she sees as a disconnect between policymakers and financiers.

She argued that banks, as the largest private funders of residential aged care construction, should have been more involved in shaping the registration and licensing framework, for cross-sector visibility and reform effectiveness.

“If we don’t have the banks on board, there is no funding,” she said.

Commercial reality and pragmatics of sector functioning is not always visible in public policy discussions, other aged care leaders attest. This must change for policy reform to acutely meet sector challenges for sector growth.

Public figures are transparent, a modern residential aged care facility can cost tens of millions of dollars to design, construct, fit out and commission. Banks assess not only the physical asset, but the operator’s ability to maintain occupancy, meet regulatory obligations, attract staff and generate sustainable returns.

For lenders, provider registration is often viewed as a risk mitigation measure.For developers, however, that same requirement can become a barrier if registration cannot be practically secured before funding is required. Logistically, functionally, the registration avenue for providers, new, or ‘repeating’ like Rockpool is an unavoidably critical step that has consequences.

Argent said she has already raised the issue with both the Commission and government officials in Queensland, and praised regulators for trying to help. Yet she believes the underlying policy conflict remains unresolved.

“This is a bigger industry problem that we’ve now got to put on the table and say, just a minute, we’ve got this new legislation, but is it fit for purpose?”

Profit, investment and the future of aged care

Within the podcast, Argent continues to also push back on another long-running debate in aged care, whether the sector is an attractive investment at all.

She names the narrative existing around profit and its implications. Australia, she advocates, needs to cease treating profit in aged care as a ‘dirty’ word if it wants private capital to collaborate in delivering future capacity.

“If we don’t start building a sustainable industry and celebrating some profit, then we’re not going to get anywhere,” she outlines.

Her insight reflects a growing tension inside the sector.

On one hand, the Royal Commission highlighted serious failings among some operators, these poor-performers do not have a place in the sector, this has been widely acknowledged. And yet, on the other hand, providers highlight that the response, of treating all providers with the ‘one-brush’ in stronger compliance and its complexity, tighter governance rules and alongside higher wages and rising construction costs, even high-performers are requiring rising significant capital if aged care is to modernise and comply.

Without private investment, many argue, the government alone will not be able to deliver the number of new beds Australia needs over the next two decades. Provider heads warn there is a gap, policy should support new entrants to help fill it.

A policy loophole, or a policy flaw?

Argent notes that Rockpool may have found a workaround, largely because of its existing credibility with lenders and regulators.

But she is concerned the same pathway may not exist for others, even smart, hard-working and highly needed innovative new entrants.

If that is true, the implications stretch well beyond one provider. This becomes a sector fault-line.

The federal government’s reforms were designed to improve quality, strengthen accountability and protect older Australians, but if those same reforms unintentionally result in harder conditions for new providers to build new homes, they may also be constraining supply at a time when demand has long bolted.

Argent’s final message is less critique as it is about the solution of collaboration.

“Let’s bring the banks to the table. Let’s try and work together.”

If the sector cannot solve the financing puzzle, the question erodes from how can Australia meet its net aged care beds target to how dire will the fallout be when those beds are not built?