Can a market-based system function when supply is rationed?

The recent decision by the Government to immediately release 20,000 home care packages is great news for the people on the waiting list who will now have access to care and services.

A further 20,000 packages will be released between November and the end of 2025.

The announcement was made following the Inquiry into the delivery of aged care services, which revealed that an estimated 200,000+ older Australians are waiting for care.

It was a reminder that, although there has been an increase in the level of competition in the aged care sector, the challenge is matching supply with the increasing demand.

While the Royal Commission into Aged Care Quality and Safety called for an entitlement-based aged care system, the reality is that supply of both home care packages and residential aged care is rationed. This was reported by the Inspector-General of Aged Care in her 2025 progress report on the implementation of the recommendations of the Royal Commission.

From 1 November, residential aged care places will be allocated to older people who access government-funded residential care services, instead of residential care providers.

With the uncertainty around funding and reform, very few new residential aged care homes have been built in South Australia in the past few years.

If providers wish to build a new home, they will need to apply for approval to the Aged Care Quality and Safety Commission, which will also decide on the total number of beds released.

We are already feeling the effects of insufficient aged care places, as most services in South Australia are experiencing high occupancy rates, putting greater pressure on our hospital system.

The number of people in Australia aged over 85 is set to surpass one million within the next decade. While we hope that many of these people will continue to live independently in the community, the reality is that they may require some level of assistance to do so.

This presents a significant challenge for current and future governments.

Are we destined for a frustrating cycle, where wait lists grow to unacceptable levels, before public demand forces the release of more funding?

Only time will tell.

Opinion piece by Darren Birbeck
Chief Executive Officer
Resthaven Incorporated