Opinion article

New funding must target Australia’s aged-care workforce challenge

Ahead of CEDA’s livestream event “Australia's aged care workforce post-royal commission” on Thursday 6 May, Senior Economist Cassandra Winzar discusses how to boost Australia’s aged-care workforce.

The Federal Budget is looming and there are reports of billions of dollars in new spending for aged care, but it will all be for nought without a quality workforce to provide care. While the commissioners of the Royal Commission into Aged Care Quality and Safety differed in their recommendations, one finding was resoundingly clear – the quality of care and the quality of jobs in aged care are inextricably linked. 

There are many challenges facing the sector, including the viability of many providers and the effectiveness and sustainability of the current funding model, but a significant portion of any new funding must go to expanding and upskilling the workforce. Changing demographics and a rapidly ageing population alone will substantially increase demand for aged-care services and the skilled workforce to deliver it. Combined with the royal commission’s recommendations on an entitlement to care, minimum qualification levels and higher average staffing hours per care recipient, demand for workers will be immense.  

In 2011, the Productivity Commission estimated the sector would need 980,000 workers by 2050. This was based only on demographics and keeping staffing levels constant, and is likely to understate the true requirements. There were roughly 366,000 workers in the sector in 2016, so there is no easy route to finding the workers we will need to get us there. 

Increasing staffing hours to the level recommended by the royal commission (which will only just bring them up to an acceptable level by international measures) will require a roughly 20 per cent increase in staff hours. Raising levels to best practice would require an increase of nearly 50 per cent.1

Where will future workers come from? 

Increasing staffing levels in the sector will not only improve conditions but could also be a vital step in reducing unemployment, underemployment and continuing the economic recovery from COVID-19.  

Working conditions in the sector must improve to retain current staff. This will require increases in wages and a review of other award conditions to make sure they are properly supporting workers and providing fulfilling careers. There is only so much promotion of the benefits of working in care that can be done without also making demonstrable change to underlying conditions.  

Higher wages and better conditions are also necessary attract new entrants. The tightening labour market means the potential pool of underutilised workers to attract to the sector could be smaller than was expected when the royal commission handed down its recommendations. But efforts must be made to broaden the workforce, with a particular focus on attracting men, younger workers and those in adjacent industries that are likely to have transferable skills, such as tourism and hospitality.  

Both current and future aged-care workers must have appropriate levels of training and qualifications to provide the quality of care the community expects. This will require investment from both the industry and government, and an overhaul of current training courses, many of which are not fit-for-purpose. Values and ethics must be at the centre of recruitment, training and development in the industry – the system cannot move to a rights-based approach without an appropriately-trained workforce that understands the role it plays in care.  

The role of migration 

Migration has historically been an important part of the sector and will continue to play a key role in ensuring enough skilled staff are available, particularly in the short-to-medium term. But it is not a panacea. The Federal Government must outline a plan for attracting skilled migrants to the sector once borders reopen post-COVID. Migration must not be a substitute for improving underlying working conditions. Migrants and local workers alike deserve good pay and conditions, and the focus should be on attracting and retaining the best quality workforce.  

Can technology help? 

In the longer term, technological solutions must also be investigated – both assistive technology in the home to reduce the need for care, and technology to improve staff efficiency on non-patient centric tasks. Technology should be used to liberate staff to focus on face-to-face care. This brings with it innumerable other benefits.  

The challenge is vast, and won’t be resolved easily or quickly, but it provides an opportunity to reform the sector and provide better quality of care for recipients and better working conditions for staff. Investing in the aged-care workforce will bring broader benefits for the labour market and the economy, while ensuring older Australians get the care they deserve. There is much we can learn from overseas in this space - the Netherlands, Japan and Scandinavian countries provide examples of personalised, high-quality care sectors that utilise innovation and technology.   

CEDA is analysing the potential solutions and engaging with a wide range of members on how Australia can beat this wicked challenge. We simply cannot keep disappointing older Australians, as we have over recent decades. CEDA will release its findings in July.

About the authors

Cassandra Winzar

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Cassandra Winzar is Senior Economist (WA) at the Committee for Economic Development of Australia (CEDA). Prior to joining CEDA she was Principal Economist at the WA Department of Communities (Housing Authority) where she focused on WA economic conditions and housing related research, including running the state government’s Housing Industry Forecasting Group. Cassandra has also held roles as the WA based Economist for the Reserve Bank of Australia, and in Transfer Pricing at EY. Cassandra has a Bachelor of Economics (Honours) and Bachelor of Arts (Asian Studies) from the University of Western Australia.