Most of us use Australia's care system in some way, or know someone who does. After all, from birth to death, we all need support at one time or another.
But as royal commissions into aged and disability care , and national scandals in child care have shown, this care isn't always good quality. Sometimes it's not available at all. At worst, it's harmful .
One of the major drivers of these failures is the very business model of care itself. In Australia, as in many rich countries, private businesses are delivering an increasing share of care.
But it wasn't always this way. So how did we get here, and how do we reform the system to better serve all of us?
In Australia, lower taxation rates and long periods of conservative government laid different foundations for the care sector. Photo: Getty.
From charities to profits
As the welfare state developed in rich countries after the second world war, governments took on some of the care for children, older people and people with disabilities that families, mutual aid associations and charities had provided.
The degree of government involvement varied across the world , and looked different in different countries. In the high-taxing Nordic countries, for example, local councils built up extensive public care systems , offering child care, nursing homes and home care.
In Australia, lower taxation rates and long periods of conservative government laid different foundations . Our constitution also shapes how care services are funded and regulated by prescribing different roles for federal and state governments.
After the war, Australian governments provided some care services themselves. But they also funded private organisations, mostly not-for-profits run by churches and charities, to deliver them.
The Australian Assistance Plan (AAP) was piloted in 1973 by the Whitlam Labor government and was subsequently extended nationally, but was abolished under Malcolm Fraser just three years later.
In the 1970s, the Whitlam government funded community organisations to provide care services alongside established bodies .
Further change has happened since the 1980s. Demand for care services began to grow, driven by population ageing, increasing workforce participation by women and changing community expectations .
Influenced by the ideas of " new public management " (also called "economic rationalism" and "neoliberalism"), Australian governments mostly relied on funding external organisations to deliver care services, rather than expanding public services to meet growing demand.
They used private businesses and market mechanisms as models. Australian governments adopted this policy paradigm and what is now known as the "privatisation" and "marketisation" of care services took off.
What is New Public Management?
New Public Management (NPM) is a way of thinking about how to organise public services that arose in the 1970s.
NPM advocated for running government entities like private businesses. By the 1990s, it was an approach used by many countries, including Australia.
Proponents of the idea believed government had become too wasteful and inefficient, so acting more like the private sector would boost efficiency, reduce waste and increase the quality of services.
A voucher for care
In the privatisation of care services, for example, the New South Wales government sold the Home Care Service of NSW in 2016 . This public institution was established in 1943 and became the largest provider in Australia of care and support to older people and people with disabilities living at home.
But the most important policy changes are better understood as "marketisation" because they change how governments fund care services and what kinds of organisations deliver them across the board .
The dominant model for government funding across child care, aged care and disability support is now a kind of voucher. Policymakers hope this funding model will enable "customer choice" in a "market" of diverse providers who compete to offer services.
It works like this: when a person is eligible for a service, the federal government assigns them an amount of funding and the person (or their family) is left to find a provider to receive the funding and deliver the service.
In child care and aged care, people with incomes above certain levels are also expected to pay some of the cost themselves.
So how has this worked in practice?
'The great and the ghastly'
Under the voucher-style funding model, for-profit providers have increased their share of provision across most types of care service.
The result is, according to political and social scientist Mark Considine , a "wide mix of the great and the ghastly" that tends to "a low-average model" revealed in many royal commissions and inquiries.
Problems are inherent in how care systems are set up. Governments leave much of the location, design and organisation of services to providers. And because these services are in high demand, providers can be sure of a steady stream of government funding into the future.
When the share of for-profit operators grows, gaps in provision and quality problems emerge as under-resourced regulators struggle to monitor operators at arm's length.
Child care services are an example, but the broad pattern is repeated across aged care and disability support .
The share of long day care centres operated by for-profit businesses increased from 62% to 72% between 2016 and 2026. Of new centres opened over the decade, 95% are for-profit . Corporate chains have multiplied – 21 of the 25 largest long day care providers are operated for-profit .
