Issues Facing the Industry

The Aged Care industry in Australia is facing major and increasing challenges as it strives to meet the predicted needs of a rapidly ageing population. The major issues facing the industry include:

• A level of funding which effectively renders the construction of new standard fee, high care facilities uneconomical
• An ACFI impact on low care which threatens the construction of new facilities in areas which demographically do not support large accommodation bonds
• A reduction in loan/value ratios by the major banks in part a reaction to recent increased pressure by the Department on performance standard and an escalation in revocation as an enforcement tool
• The threat of further Bridgewater type situations with a resultant levy on Approved Providers holding bonds to cover defaults
• The dual effects of recent interest rate falls - a major plus for new facility construction, but a major reduction in income for facilities charging bonds
• A depressed market for aged care facilities consequent on increased sales by providers facing compliance or funding issues or both.