A new independent report is calling for major structural reform of our aged care system, warning that without significant change, New Zealand faces a shortage of more than 9,000 residential care beds within just over a decade.
The Aged Care Ministerial Advisory Group, chaired by former Labour minister Hon David Cunliffe, released its report this week, titled A place to grow old. The 186-page report makes 40 recommendations covering funding, workforce, contracting and how care costs are shared between individuals and government.
Cunliffe says every New Zealander deserves to age well, with dignity and choice, but that will not happen unless the existing system, which he describes as fragmented, hard to access and underfunded, is fixed. He says pressures have been building for years, with bed shortages, service closures and carers unable to cope already starting to show, and that those pressures will only multiply as the population ages.
There are currently around 900,000 people aged 65 and over in New Zealand. That number is expected to reach about 1.3 million by 2040. In 1996, roughly one in 10 New Zealanders were aged over 65. By the 2050s, that is projected to be one in four.
The report modelled three scenarios. Doing nothing would leave a shortfall of more than 9,000 residential beds by 2037/38, costing government nearly $600 million more each year and pushing more pressure onto hospitals. Simply increasing funding without structural change would ease pressure temporarily but become unaffordable within years.
The recommended path, involving structural reform, supporting more people to stay at home longer and rebalancing how costs are shared, is projected to cost around $3.7 billion by 2037/38, hundreds of millions less than the other options.
Among the recommendations is lowering the asset threshold at which people must contribute more towards their own care to $100,000, alongside price increases of 6% for in-home care and 7.1% for residential care beds within the next two years.
Not everyone believes the report goes far enough. The Public Service Association, which represents thousands of home support workers, welcomes the direction of the report but says real reform cannot happen without addressing pay equity for care workers, after the sector’s legally established pay equity rate was scrapped and workforce pay was excluded from the review’s scope entirely.
Associate Health Minister Casey Costello has welcomed the report as substantial and says government will consider its recommendations carefully before making policy and funding decisions, with the Ministry of Health now working with other agencies on further advice.
