Former prime minister Paul Keating says the ballooning cost of aged care should be met by a HECS-style funding model, where every Australian is extended a loan to pay for their care and the costs are recovered from each individual’s estate, The Age reports.
The model would reduce the fiscal burden on a generation that will already be carrying the costs of the coronavirus pandemic and allow easier access to home support packages, which currently have long waiting lists. Each person’s assets would help to maintain them in later life and it would be more difficult for family members to call on those assets.
“We’re not forcing anyone out of their home, we’re not obliging aged persons to negatively mortgage their home, you’re not asking families to chip in and pay for their relatives in their accommodation or their care, and so I think such a system has a lot of advantages,” Mr Keating said.
The scheme, which Mr Keating put to the Royal Commission into Aged Care Quality and Assurance departs from his previous advocacy for a national insurance model funded by an employer directed levy.
When superannuation was first conceived in the late 1980s, there were 6.5 people between the ages of 15 and 65 supporting every one person above 65. There are now 3.7 people supporting every person over the age of 65 and the figure is predicted to fall to three by 2040.
“As you know, a lot of young people now who actually become that cohort, the tax paying cohort, many of them have low incomes, they’re renters, they start life with a HECS debt if they’ve been to university and of course they pay the GST 10 per cent cold, regardless of income,” Mr Keating said.