Federal budget 2012: expert reaction

9 May 2012

The 2012-13 Budget provides a modest but important beginning to the Government's $3.7 billion committment over the next five years to the valuable Living Longer. Living Better Aged Care Reform package announced in April.

Headline items for "strengthening the aged care system" include $955 million for the new integrated Home Support Program, $670 million for residential care, $268 million for people with dementia, $192 million to support diverse groups, and $256 million to build a new aged care system including the Aged Care Financing Authority and a new Gateway to improve access to services.

A closer look at the figures reveals that genuinely new funding is delayed and largely provided through redirecting existing funding. Growth in services will depend significantly on increased user charges albeit with careful means testing and caps on user costs. Means testing is expected to save $183 million in home care and $378 million in residential care.

An extraordinary $1.6 billion of savings to be achieved from "refining" the Aged Care Funding instrument for residential care will largely fund the $1.2 billion to be directed through the Workforce Compact to improve pay and conditions for aged care workers.

Overall, the Government has moved towards a fairer and more sustainable aged care system directed more to the overwhelming priority of older people for more care at home. There are major "buts" and questions ahead, including the capacity of a minority government to pass the enabling legislation. In the end a budget is a plan rather than an achievement but this one has substantial value for care of older people and it deserves bipartisan support.

View Budget commentary from other experts atThe Conversation