While tonight's Budget includes new aged care funding, the Retirement Living Council (RLC) warns the Commonwealth is still leaning too heavily on crisis response - and missing the preventative reforms needed to keep older Australians healthier and independent for longer.
The $3.7 billion aged care package - additional aged care beds, faster access to Support at Home and free personal care services - is welcome, but the RLC says it still fails to address the deeper structural problems driving pressure across the system.
"The Commonwealth is choosing the cheapest option on paper, but it becomes the most expensive option in practice when older Australians end up in hospitals and aged care earlier than they should," RLC Executive Director Daniel Gannon said.
It also overlooks a clear barrier to prevention: Commonwealth Rent Assistance (CRA) settings that penalise older Australians for moving into safer, age‑appropriate housing.
Mr Gannon said the Commonwealth's own projections show Australia would need to open a new residential aged care facility every three days for the next 20 years just to keep pace with demand.
"That is what happens when systems are designed around crisis response instead of prevention. We are still operating a system that waits for older Australians to hit crisis point before support escalates," he said.
"It's the equivalent of continually mopping the floor while ignoring the leaking tap - we need the Commonwealth to show some resolve and turn the tap off.
"This isn't financially sustainable, it isn't operationally sustainable, and it isn't workforce sustainable. We can't build our way out fast enough if policy settings keep pushing people into higher care earlier than necessary.
"At the same time, 79 per cent of retirement villages now offer some form of federally regulated care on-site - evidence that retirement communities are evolving to support ageing Australians earlier, before crisis point."
Mr Gannon said outdated CRA settings continue to lock older Australians out of crucial support. He said tonight's CPI-only indexation falls well short of the meaningful uplift needed by those in rental stress.
"CRA reform is one of the smartest investments the Commonwealth can make to keep older Australians healthier, connected and independent," he said.
"CRA usage among Australians aged over 65 has increased by 70 per cent since 2013, confirming older Australians are now one of the fastest-growing groups relying on support just to keep a roof over their heads.
"We need a full-scale review of CRA because this is not about creating a new welfare system. It's about fixing outdated rules that no longer reflect the real cost of housing older Australians safely."
Mr Gannon said failure to meaningfully expand preventative housing and care settings would only deepen pressure flowing into hospitals. Almost 3,300 older Australians are currently stuck in public hospital beds despite being medically ready for discharge.
"Hospitals are becoming the overflow valve for a system under immense strain, and yet retirement living - one of the clearest preventative solutions available right now - continues to sit on the sidelines of national reform conversations," he said.
"Research shows there are 14,000 fewer hospital admissions every year because of the support, connection and preventative care delivered within retirement living communities."
