Indeed, there is nothing surer than Death and Taxes.

 

Former prime minister Paul Keating says the ballooning cost of aged care should be met by a HECS-style funding model, where every Australian is extended a loan to pay for their care and the costs are recovered from each individual's estate.

The model would reduce the fiscal burden on a generation that will already be carrying the costs of the coronavirus pandemic and allow easier access to home support packages, which currently have long waiting lists. Each person's assets would help to maintain them in later life and it would be more difficult for family members to call on those assets.

"We're not forcing anyone out of their home, we're not obliging aged persons to negatively mortgage their home, you're not asking families to chip in and pay for their relatives in their accommodation or their care, and so I think such a system has a lot of advantages," Mr Keating said.


Former prime minister Paul Keating has proposed a HECS-style scheme for aged care funding.

The scheme, which Mr Keating put to the Royal Commission into Aged Care Quality and Assurance on Monday morning, departs from his previous advocacy for a national insurance model funded by an employer directed levy, similar to the superannuation scheme that he designed as treasurer.

He now believed it would be politically difficult to impose a new levy, given that there was already resistance to an extra half a percentage point going to the superannuation levy.

When superannuation was first conceived in the late 1980s, there were 6.5 people between the ages of 15 and 65 supporting every one person above 65. There are now 3.7 people supporting every person over the age of 65 and the figure is predicted to fall to three by 2040.


As Treasurer, Paul Keating established Australia's superannuation scheme. CREDIT:PETER MORRIS

"As you know, a lot of young people now who actually become that cohort, the tax paying cohort, many of them have low incomes, they're renters, they start life with a HECS debt if they've been to university and of course they pay the GST 10 per cent cold, regardless of income," Mr Keating said.

"So to this cohort we are inviting them to carry the great body of retired aged people and of course now with the debts of the COVID budgetary interventions."

He brushed away the suggestion that it might be viewed as a "death tax".

"If there's not assets there then the Commonwealth pays, but it's a very nice way of working out what the Commonwealth should really pay vis-a-vis the residual assets of an aged person in superannuation or bricks and mortar assets etc."

He conceded that the issue of people trying to divest their assets before they got into the system would need to be addressed in policy.

The Royal Commission is examining the funding, financing and prudential regulation of the sector.

Counsel assisting Peter Gray QC said in his opening remarks there were some "surprising features" in the existing arrangements, including that home-care packages were not required to report what goods and services they were providing with government subsidies, which amount to $2.5 billion per year.

Meanwhile, residential care providers, which receive about $7.5 billion in care subsidies, do not adequately report how that money is used and what profit or loss is made. They are not required to disclose what proportion is spent on management fees or rent or to maintain a particular level of staffing.

www.theage.com.au/national/nsw/hecs-for-aged-care-paul-keating-s-solution-to-fun...



Oh boy!

I bet Albo just loves the thought of having to defend the inevitable election claim that this would be a Death Tax. 

Yeah, thanks Paulie.   

it wont encourage people to accumulate  much in the way of assets  once they reach a ripe old age   if those who do not have any assets......  the Commonwealth will pick up the tab..


why is it   with Labor   they expect those who went without to buy their first home    and forever after pay and pay and pay.....more taxes... called rates land and water...many investing their money in their property  which improved its value....yet are expected to pay out for agedcare... whilst those who didnt bother to invest in a house of their own...found it easier to gamble or smoke......are given a free ride..

because this is what will happen....if you have any assets   it will be hacked at by how many years you happen to spend in agedcare...and Paul says it wont cost the family anything... seriously?......

of course its a death tax.... but only for those who saved and invested wisely...

Broadly, I agree with the sentiments being expressed here. but acknowledge that it's a tough one.

I think many people (most) believe the standard of Aged Care in this country is pretty poor - esp. on the part of the for-profit providers.

So, questions need to be asked about how care is best delivered for our Aged - which includes us in the future.

Then, we've got the Australian economy in the deepest recession since the Great Depression, and racking up debt like it's going out of style (granted, with not much choice).

Fair to say we won't hear too much about "Debt and Deficit Disaster" out of the LNP for a while...we can hope, anyway. 

But I digress...

"If" we want a better standard of care, then a couple of things need to be realised:

1) We need to change the way the sector operates. Removing the profit motive would be a good start.

2) We also need to properly fund the thing, so that the money is spent where needed (not banked as profits or dividends - or both).

Number 2 costs money, so the question is "How do we fund it, coming out of this recession?"

So, yes. there will be all sorts of suggestions.

For those of us who own our houses, one particularly galling idea I keep seeing pushed, is the idea of introducing a broad-based Land Tax, which angers me on a number of fronts:

1) We already pay a "Land Tax". It's called "Rates".

2) Some already pay a second discreet land tax, depending on property use/value.

3) There is no mention of grand fathering, meaning that those of us (almost everyone) who paid a fair chunk of Stamp Duty on the purchase of the home, will then be asked to pay again. I for one will be staunchly opposed to that.

Again, just another example of the kinds of "tax reform" the "economists" will throw out there, knowing that Governments across the country will be desperate to recover lost revenue post-pandemic, regardless of the Political cost.

Expect to see more such proposals being bandied around...

The bastards running aged care homes will still
spend only $6 per day on food per person
and pocket the rest for themselves.

Sir lastnail wrote on Sep 15^th, 2020 at 12:29pm:



Baked beans and mashed spud for Xmas dinner.
Could you put up with that kind of cuisine?

Thank you, Brother Keating the well-heeled in retirement courtesy of the dumb public who have no say (The Silenced Majority) - we always knew you and your mates could offer us yet another way sneaky to remove from retirees their well-earned and ensure that only your kind would be able to have a legacy to YOUR future generations, thus dividing society into its natural situation of massively rich masters and absolutely poor serfs...

Free Tertiary Education for REAL subjects!

No HEX on retirement homes!

Plebiscites To The People NOW!

Bobby. wrote on Sep 15^th, 2020 at 12:30pm:


Went to pick up the disabled ex in 'rehab' for a hip operation... 600 km each way - and lunch had a choice of a chintzy sandwich or a pie..... first thing we did was head for the local Chinese with an order list from all the inmates...... only one or two die-hards said NO to a Chinese run.... and the staff were appalled - what if they are poisoned on our 'watch' .....

Don't ever mention Florence Nightingale to me in the context of hospital care again..... 

Valkie wrote on Sep 16^th, 2020 at 7:24am:


Invest in a cardboard box then....Who do you think is going to pay for your aged care mate....You do realise you must pay for it yourself and this proposal gives people a means to fund their own aged care without burdening the taxpayer....The other alternatives are to take out private insurance, self fund through your own assets and income or live in a cardboard box???