Government funding has not kept-up with the challenges faced by the aged care sector, a sector that has been hit by staff cost increases, labour shortages, the ongoing effects of COVID, as well as general cost inflation.
A report released by Aged Care Matters, a movement of members of the New Zealand Aged Care Association, said government spending on aged care appeared to be low compared to other OECD countries.
The report, by independent economics consultancy NZIER, prompted calls for the two-decade old funding system to be reviewed.
“Our public health system relies on the availability of beds in the aged care sector to meet the current needs of people who cannot live independently or need palliative end-of-life care,” noted Norah Barlow, Aged Care Matters’ convenor and Heritage Lifecare chief executive.
The NZIER report found underfunding by the government meant there was little incentive for existing aged care providers to increase investment in new beds or facilities.
“This raises the risk that the number of beds available will plateau or even start to fall significantly at a time when demand for aged care will increase, given the ageing population,” NZIER economists Philippa Miller Moore and Christina Leung said.
If access to private aged residential care services did not keep up with demand for aged care, the burden of care for New Zealand’s ageing population would fall on other parts of the healthcare system, the report said.
NZIER concluded the West Coast, Northland, Whanganui and Tairāwhiti were likely to be left further behind than other regions in the coming decade.
