The math ain't mathin: Is Australia funding independence or decline?
Yoo mah loondee – hello in Ngunnawal language
I want to pay deep respect to the Ngunnawal and Ngambri people, on whose lands I have the privilege of speaking today.
And I acknowledge all Aboriginal and Torres Strait Islander people – here in the room, and watching this telecast.
More than that, I want to acknowledge that, in First Nations cultures, Elders are not hidden away; they are present, they are listened to, and entrusted with knowledge.
By contrast, I worry that in our broader society, we are sending the opposite message: that ageing is something to be managed, rather than valued.
I start here deliberately because what I want to talk about today – system reform, oversight, and the future of ageing – is grounded in this question of how we value ageing – and older people – in the first place.
Let’s zoom out for a minute and take this conversation beyond the word ‘system’, to us as a society. There was once a time when caring for older people was not a system. It was something we held collectively: in families, in communities, in culture.
That hasn’t totally disappeared. It still happens every day quietly, and often without support.
But over time, we have shifted more of that responsibility to government. And we now fund that responsibility collectively, through our taxes.
In return, we expect a system of aged care that recognises the whole person – not just their physical needs, but their identity, relationships and the life they continue to live. The Government has now made that expectation law.
The new Aged Care Act is built around a powerful proposition: that every older person is entitled not just to care, but to dignity, respect, connection, individuality and cultural safety. They are the very words in the Act
That’s a powerful legal compass the Government has set. Because it delivers a double dividend: a system that invests in human connection and meaning is not only more humane, it is the only one that makes economic sense.
For that, the Government deserves real credit. It is one of the most important shifts in the history of aged care reform.
But a promise on paper is not the same as a promise realised.
And this is what I want to share with you today: As Inspector-General of Aged Care, I cannot see how our system is geared to deliver that promise. In some cases, I would go further:
the way aged care reform is being implemented, is causing harm. And that doesn’t just cost people their rights, it costs the taxpayer as well.
I want to be clear: this is not criticism for criticism’s sake. I want nothing more than for the Government to realise its legislated ambition. But right now, the plumbing of the reforms is undermining the poetry of the Act.
Unless we heed the evidence and change course, that legislated promise will slip out of reach.
We’ve ended up with reforms that make sense in isolation, but clash in practice. The emerging result is perverse outcomes.
We say we want people to age in place, yet we discourage people from accessing support at home. We say we want to slow demand for residential aged care, yet we weaken the very supports that prevent it. And we say we cannot build enough beds, while making it harder for people to stay out of them.
I want to be honest with you. Human rights will always be my greatest motivation, but I want to meet the government where it says its challenge lies: the money.
The rhetoric I hear is that the budget will be never be enough. Demand is vastly growing because of population-ageing. And, at the same time, the funds for aged care are reducing as the tax base lessens.
Sure, that’s true ... but it gives you the impression this is ultimately an unsolvable problem. And once you believe a problem is unsolvable, you stop trying to solve it, and start trying to contain it.
I’ve watched in aged care how this fatalism has reshaped the contest itself. The question now fights on the battle lines of 'how will you ever manage ever-growing demand?', instead of 'how do you stop generating so much demand in the first place?'
We have misconceived the problem, and so we are fighting the wrong battle.
The new Aged Care Act actually demands we confront a different question altogether. Not simply: how do we stretch a finite budget across ever-growing demand? But instead, how do we use the more than $40 billion we already spend to prevent decline, support independence, and help people stay home for longer?
Because what I have observed as Inspector-General is that we have been behaving as if we have to choose between dignity and fiscal responsibility; as if independence, meaning and connection in older age – in our homes, in our communities – are somehow in tension with economic outcomes.
But this is in fact, one of those rare moments in public policy where the human answer
and the economic answer are actually the same.
When people receive the right support earlier, decline slows. Fewer people reach crisis. Fewer people need residential aged care, and when they do, they need it later. That means the same budget works harder, for longer, for more people.
Right now, we are instead spending the aged care budget in ways that make ageing at home harder. And, by doing so, we are pushing people – unnecessarily – towards crisis.
So, if you were expecting me to stand up at the National Press Club and argue 'more money, more money' for aged care, I’m sorry to disappoint.
Because the real issue is not that we are short of funding. It’s that we are short of value.
So indulge me for a minute. Imagine a time in your life when you are much older and might depend on others for care. How do you see your life? I’ll bet you don’t see your life measured in minutes of care. Or a checklist of tasks. And I bet you don’t see your whole life flattened into the clinical maintenance of your physical body.
Yet, despite the beautiful sentiments in the new Aged Care Act, I worry this is exactly the conception of ageing we are inadvertently signalling.
The system’s operating logic has become increasingly transactional: tasks, minutes, outputs., units of service.
Sure, we can measure those things. We can fund them. We can audit them. But in any system, what we measure quickly becomes what we value. And right now, those values sit in direct tension with a law that says our system should be grounded in independence, dignity and connection. In effect, we’ve ended up with a system that’s trying to deliver relational, humane, preventative care through a system built for transactions, compliance and late-stage intervention.
For example, under Support at Home – the government’s home care funding program – your clinical care is free. But supports that preserve independence (meals, transport, social participation, practical help to keep daily life functioning) require serious financial contributions from the older person.
We have priced care for your independence, and support to interact with your community, at the highest cost to you as an individual.
That sends a clear signal through our system design: that connection is optional, and priced to be the first thing people give up.
And when we decide that your social interactions don’t matter as much as your clinical care – by virtue of what we will fund and what we won’t – we are making a values choice for the system. Because we are tacitly influencing what you give up in your 'choice' of care.
If you are a pensioner, choosing between paying for support to stay independent or your electricity bill, which one are you going to give up?
This is no marginal issue. Around three quarters of people using Support at Home are pensioners, meaning these forms of care are pushed out of reach for most people in the system.
This is where the legislated promise becomes undermined by its own design. But it’s also where the economics begin to unravel.
The supports we are discouraging people from using are the very supports most likely to help them remain independent, connected to their communities, and out of residential aged care.
And residential aged care is, by far, the most expensive part of our aged care system. The average annual cost to the taxpayer for a person in residential aged care is around $123,000, compared with around $30,000 to support someone to remain independent at home.
Every unnecessary or premature entry into residential aged care driven by the barriers and disincentives in the home-care system, drives avoidable expenditure at the most expensive end of the system.
That is the design failure.
Which brings me to the two fundamental problems I see facing us.
Failure to fund prevention
First, we have weighted the aged care budget towards funding crisis, not preventing it.
Right now, the way we distribute the aged care budget tells a very particular story. It tells us that we are far better at responding late, than supporting early. And far better at paying for dependence than investing in independence.
If you look closely, a pattern emerges: early support is the hardest thing to access. The way we administer our aged care budget sends people the message: “Wait.” “Hold on.” “Come back when you are worse.”
And that’s exactly what people do. People delay getting help because it is too expensive.
Others disengage because the system is simply too difficult to navigate. For some - particularly those who have experienced trauma at the hands of institutions, it goes deeper than that; the system feels unsafe. So some withdraw. And some never enter the system at all.
Many cannot access what they need in time, because waiting pushes them past the point where early support would have made the difference.
Eventually, the system does respond. But when it does, it does so at far greater cost. Long wait-times and long waitlists are deferred costs, with a higher bill.
People don’t disappear from the system when they wait, or even when they give up on it. They come back. And, when they do, they’re sicker and most often, they need more expensive care. By the time people finally receive help, they are dealing with complexity that could have been avoided.
More than 200,000 people are now effectively stuck at the front door of the system. And in that wait, decline accelerates.
What drives people into residential aged care is primarily functional decline: cognitive and physical. It's the day someone can no longer rise from a chair, or remember how to get through their daily routine.
These losses are often preventable, or at least delayable, but only if we respond in time. Every week we wait, that decline goes unchecked, and the threshold to entering residential care creeps closer.
Which means we are in danger of allowing residential aged care to become the default outcome of a system that made every earlier pathway too hard to take.
So our people who mind the pennies should be very careful not to treat the queue as a budget control. Because waiting is not free. Decline is not free. And premature residential aged care is certainly not free.
This idea that we have to choose between compassion in addressing someone’s immediate need, and budget austerity, is false. The real fiscal risk may be the queue itself.
I’ll say it again: What we have is not a funding problem. It’s a value problem. And it’s hitting the most impoverished in our society, hardest.
Let me explain, because that is not what the reforms intended.
At the heart of the aged care reforms is a very defensible idea: Those who can afford to contribute should, to ease the burden on those who cannot. That principle sits at the core of many of our social support systems in Australia.
But that is not the system we have built in aged care.
The way the means test for aged care works is that it does not simply ask people to contribute based on what they have. It asks them to contribute based on how much care they need. Which means two people with exactly the same income are asked to pay very different amounts, simply because one is frailer, sicker, or further along the trajectory of decline.
So the person who needs more care, pays more. And basic economics tells you what happens next. The person most likely to walk away from care, is the person who needs it most.
If we are effectively pricing people out of the very care that is designed to keep them independent at home, we are likely pushing them towards something far more expensive to the tax payer: residential care.
So instead of a system where those with the greatest capacity contribute more, we have created one where those with the least face the steepest trade-offs. Where the poorest bear the greatest burden of forgoing care and, ultimately, of declining without it.
Protracted wait times, co‑payments, and the complexity in accessing the front doorway to the aged care system might look like they stall or even save costs. But in reality, they are powerful behavioural signals. They disincentivise early intervention by showing people: staying at home is too hard.
It plays out in a story I hear so often it cannot be dismissed as anecdote: 'I can’t afford to stay at home. I can’t keep doing this. Residential care is my only option.'
That is heartbreaking. But it also makes no economic sense.
We move from supporting someone at home – perhaps footing a pensioner’s co-payments to the value of $200 a week – to paying over $2,000 a week once they have prematurely or avoidably entered residential care.
That is why to me - the math ain’t mathin.
But this design problem can be fixed. If we invest earlier, or at the very least remove the disincentives to early support, we slow decline, we reduce severity, we extend independence, and that means we reduce the cost of care over time.
This is not heretical. Nor is it a leap of faith. The Productivity Commission said the same thing only last year.
And we have decades of research now showing that timely, low-level support, social connection, appropriately modified home environments and continuity of relationships delay and even avoid high-cost, high-intensity aged care.
A meta-analysis spanning 283 studies found that the strongest evidence for reducing both the number of people and the time they spend in residential aged care, lies in multifactorial interventions that address both social and clinical needs. Delivering one without the other means we needlessly lurch people toward the very end of the system where we are trying to slow demand.
And the economics follow. Even modest delays in entry into residential aged care generate substantial savings that can be reinvested back into the system.
Early modelling commissioned by my Office indicates that the avoided expenditure from delaying entry into residential aged care – even just from redesigning home care around timely, coordinated, assessment-led support – delivers savings to the taxpayer measured in the billions. Those billions can be reinvested right back into the system to service more people, more quickly.
We know that when we support cognition, function, carers and connection alongside clinical care, frailty and cognitive decline are reduced. Every single dollar spent reducing decline is a dollar working harder for older people and taxpayers alike.
That is why those supports should never be treated as optional extras; they are core system infrastructure. They are the very things that help prevent the aged care system from becoming overwhelmed as our population ages.
Yet, they remain the areas where our investment and incentives are weakest.
We keep asking whether we can afford prevention. The better question may be whether we can afford continuing to fund preventable decline.
There is yet another place where the math ain’t mathing for me.
This is my second fundamental problem.
System inefficiency
The hundreds of older people I speak to see it, and it is also the most consistent observation of the providers I speak to. It’s that we have built inefficiency into the system by design.
It’s best represented by the story an older woman shared with me.
Her GP prescribed a simple pair of crutches urgently, so she could stay mobile, independent, and at home. The value of those crutches? About $50. For a pensioner living on less than $600 a week, that’s not a small amount, it’s the difference between getting through the week or not. So she turned to Support at Home; the home care funding stream of our aged care system. Under the program, those same $50 crutches cost the taxpayer $1,800 and a 3‑month wait. Why? Because the system insists that an in-home occupational therapist assessment must be funded before it can fund what a GP had already said was necessary. So, she waited. For 3 months. In that time, her risk of falling increased dramatically. Her confidence dropped. Her world shrank. And, if she had fallen, we would have been dealing with hospitalisation, rapid decline – and, if she could get a place – entry into residential aged care, at a cost to the taxpayer of around $123,000 a year. All for want of a $50 intervention, delivered at the right time.
Of course there is an important role for specialist allied health assessments: but where’s the proportionality here? And how will we ever have enough occupational therapists to service this?
Let’s say she didn’t fall: we have still built a system that would rather spend 36 times to delay support, than what it would have cost to deliver it immediately.
That’s not just inefficiency. It’s what happens when a system loses its sense of value.
And that’s not a one‑off story. I hear versions of it all the time. At a macro-level, the assistive technology sector – the one that delivers critical aids like mobility chairs, bed lifts and even crutches – is telling my Office this is happening at scale.
People want – and urgently need – these mobility supports to stay independent. But the system slows everything down, which accelerates their decline. To the point of crisis.
Again we see the same effect: the system makes it hardest for those with the least means to access timely, essential care.
Hardship
And that brings me to hardship. Because access to hardship assistance is meant to be the safety net of the aged care system.
But what my Office sees, suggests something very different.
In the first 2 months of the aged care reforms, hardship assistance requests rose by 88%. That shows hardship is not an edge case. It’s becoming a structural feature of the Support at Home system. That’s a signal that the system itself is generating hardship.
What this points to is not a failure of principle, but a failure of design.
The surge in hardship applications is not even indicative of the true prevalence of hardship, because people tell us they abandon applications, withdraw, or never apply at all. Not because they won’t qualify, but because the process is too complex, too bureaucratic, and traumatising to navigate.
For some groups, this runs deeper still. Aboriginal and Torres Strait Islander Elders – including Stolen Generations survivors – tell us the system itself can feel unsafe. That the processes designed to support access to care can echo the very institutional experiences they have spent a lifetime healing from.
In some cases, even the attempt to recognise past harm becomes part of the problem.
Across several jurisdictions, state and territory-based redress payments – modest sums intended to acknowledge past wrongs and support healing – are counted as assets when survivors are assessed for Support at Home funding.
In practical terms, this means survivors can be asked to pay more for care, or miss out on services altogether, all because they accepted an apology from a government.
This is not a separate issue. This is what design failure looks like at its most acute.
And the consequences are predictable: People disengage from Support at Home; they step back ...or never step forward at all. But they do not disappear. Like I said, they come back later– sicker, frailer, and with fewer options.
And at that point, the pathways narrow to crisis: hospital admission, or residential aged care.
The bed illusion
Which brings me to one of the biggest misconceptions: I call it the 'bed illusion', this idea that the answer to an ageing population is 'more beds'. If we just build enough of them – quickly enough – we can meet the demand.
But I see us keep trying to build our way out of a problem we are designing our way into. The real question should be: how do we stop generating that demand in the first place?
We already have clear Australian evidence that when people are properly supported to stay at home for longer, it roughly halves the rate of entry to residential aged care.
Under Australia’s parallel Aged Care model for veterans, better assessment, better care management and better targeted support keep people independent for longer and massively reduces reliance on this most expensive end of the aged care system. In fact, the model keeps people out of residential aged care on average for almost 13 months longer than the general population’s Support at Home parallel. A 13 month reduction is huge when you consider the average stay in residential care is 2 years.
Again, early economic modelling commissioned by my Office suggests that this approach could be achieved within the existing aged care budget for the whole population. Applied across the number of people receiving home care each year, it points to almost $2 billion in avoided residential aged care expenditure, annually.
The most important lesson here is that better outcomes do not come from bigger budgets. They come from spending the money more intelligently.
And even if you park the money issue for a minute, the simple reality is that the residential aged care capacity to absorb growing demand does not exist today; and on current trajectories, it never will.
If we put aside the promise made by the new Aged Care Act – which we should never do – the promise that people should be able to age in their homes and communities, the conclusion remains the same: we should be doing everything in our power to reduce avoidable demand for residential aged care, because we will never build our way out of this problem.
Other countries have faced into this problem, and are well ahead of us. How far behind we are, is partly demonstrated by the fact we have one of the longest average stays in residential care in the OECD.
In Japan, the Netherlands and Sweden, aged care funding is deliberately designed to avoid unnecessary or premature entry into residential care.
Denmark shows the dividend of this approach. By investing in the front end – home care, assistive technology, home modification, rehabilitation and reablement – the country has drastically slowed demand for residential aged care and reduced hospital visits.
Remember that unsolvable problem? That an ageing population inevitably means ever-growing demand for residential care, ever-growing expenditure, and ever more beds? Denmark's experience exposes the flaw in our fatalism.
This is not an unsolvable problem. It is a problem we have been solving for incorrectly.
Between 2010 and 2022, despite a sharply growing older population in Denmark, the number of people aged 75 and over living in residential aged care actually dropped. More older people. Fewer people in residential aged care.
And this could not be more urgent for Australia. Yesterday, the Parliamentary Budget Office projected that, over the next 10 years, our ageing population will grow by around 35%, while aged care spending as a share of GDP will grow by only around 7%.
If we continue to frame ageing as an unsolvable problem of ever-rising demand, those numbers should alarm us. But if Denmark has shown us anything, it is that the answer is not simply spending more. It is designing differently. It is reducing avoidable demand for the most expensive care before it arises.
Denmark isn't some unattainable Nordic unicorn. We have already run a version of this idea for veterans here in Australia, and seen similar signals.
This is where the evidence becomes an opportunity. Because that model achieved better outcomes with substantially less funding than traditional home care packages.
If we can combine timely access with the kinds of supports proven to delay entry into residential care, then the benefits are felt twice: older people spend longer living well at home, and taxpayers avoid the cost of premature residential care.
We have all the same ingredients as Denmark, here in Australia: all those same types of support, but there are multiple hurdles to accessing them. They are the very supports embedded in our community and home support programs, but which we currently disincentivise through wait times, complexity and cost.
In fact, the Australian Commonwealth Home Support Program and Denmark’s municipal model share structural DNA. So this is not about starting again. Australia already has the building blocks. We just need to remove the barriers that stop them working.
And that requires a fundamental reorientation of how we fund, measure and deliver care.
Focus on outcomes
We need to be brave enough to let go of what look like short‑term savings – being the delays and barriers we have built into home care and community support.
Instead, we should fund for outcomes. Reward providers for what matters: helping people stay independent, avoid hospital, and delay entry into residential care. We need to strengthen community support. We need to make early intervention easier, not harder. We need prevention to be treated as infrastructure, not expenditure. And we need a stronger role for allied health and multidisciplinary care.
That is how we delay entry into residential aged care. That is how we reduce long-term cost.
But most importantly, it’s how we support people to live lives defined by more than the management of their physical needs. It’s abundantly clear: ageing in place is not sentiment. It is fiscal necessity.
When the right supports keep someone living well at home for longer, everybody wins: the older person, their family, and ultimately the taxpayer.
That is the difference between administering reform and delivering it.
So, are things going to change? How do we create the tipping point? Well, systems don’t change because they should. They change because we refuse to accept the outcomes.
The uncomfortable challenge I want to hold out here, is that we – as a public – need to change how we apply pressure.
Often, we demand quick fixes. We reward short‑termism. We turn away from the evidence when it doesn’t deliver immediate savings, or when it challenges what we already believe.
If we keep doing that, we will keep getting systems that optimise for noise, not outcomes.
We have the evidence. We have the lived experience. We have the economics. Now we need to collectively insist they are applied.
It is fitting that I make these remarks here at the National Press Club. Because journalists play a vital role in that insistence.
To all the journalists listening, you are not just observers of our public policy debates. You help shape them. The questions that receive attention are often the questions that receive answers.
Keep aged care on the agenda. Pull it back to the reform’s first principles: What does the evidence say? What outcomes are we getting? And if the two don't match, why not?
As a public we need to demand systems designed to deliver outcomes, not announceables.
We also need to show governments that we will back long-term value over short-term politics – provided it is grounded in evidence.
It’s not naïve to think this will be heard by government. We have seen moments – even in the past 6 months – where the Government has listened and shifted course.
But those responses have been uneven.
That shows change is possible, but it is not automatic. It happens when we insist on it.
Which means we cannot accept reform that nods to the evidence, while funding design choices that undermine it.
Every one of us has a stake in this because, if we are lucky, we are all future participants in this system.
And when that time comes, none of us will care whether the policy was easy. We will care whether it delivered a life of dignity, connection and meaning. And whether the system was still standing when we needed it.
I leave this job – and leave YOU with that mandate.
Being Inspector-General of Aged Care has been the greatest privilege of my life.
To the older people who let me into your lives – and to those who felt no one was listening: my deepest thanks. You were heard, and you will go on being heard because your stories are now woven into the work of my Office. They will outlast me.
To my team: for your endless support, thank you from the bottom of my heart.
And to my husband: this role asked more of our family than most people will ever see. This job has only been possible because of you.
Thank you.