Aged Care Alert | Draft National Strategy for the Care and Support Economy

7 minute read  07.06.2023 Penelope Eden, Benjamin Roe

On 28 May 2023, the Department of Prime Minister and Cabinet (Department) released the Draft National Strategy for the Care and Support Economy (Draft Strategy).


Key takeouts


  • The Draft Strategy is 'the start of a conversation about Australiansvision for our care and support system'.
  • It aims to provide 'a proactive approach' to many of the issues confronting the 'aged care, disability support, veterans’ care and ECEC [early childhood education and care (ECEC)] sectors' (Care Sectors).
  • The Draft Strategy proposes a 'Roadmap' with specified timing for achieving policy outcomes and corresponding 'goals' which identify broad policy priorities.

The Prime Minister's press release stated that the aim of the Draft Strategy is to focus 'holistically on improving the quality of care and support jobs within four key sectors – early childhood education and care, disability support, veteranscare and aged care.' The Draft Strategy is 'the start of a conversation about Australians’ vision for our care and support system', and aims to provide 'a proactive approach' to many of the issues confronting the 'aged care, disability support, veteranscare and ECEC [early childhood education and care (ECEC)] sectors' (Care Sectors).

Importantly, the Draft Strategy applies across 'the care and support economy' and encompasses major government support programs (including those administered by state and territory governments). The Draft Strategy appears to be the first step on a reform journey which will see greater harmonisation across these Care Sectors. To achieve these objectives, the Draft Strategy proposes a 'Roadmap' with specified timing for achieving policy outcomes and corresponding 'goals' which identify broad policy priorities.

We discuss this proposal below.


Reform 'Roadmap' for the next decade

While not articulating specific policy initiatives, the Draft Strategy includes a 'Roadmap', with several 'horizons' framing policy initiatives. The horizons in this Roadmap are outlined below:

Commencement Phase: The Draft Strategy is proposed to commence in 'mid 2023' and will prioritise a 'Workforce Initiatives Action Plan' and the finalised National Strategy for the Care and Support Economy.

  • Horizon 1 Action Plans: This Horizon includes the delivery of a regulatory review, new data standards, worker safety initiatives, establishing a governance, monitoring and evaluation framework, commencing other priority projects and an evaluation of existing care and support initiatives. Horizon 1 will coincide with the delivery of the several complementary strategic reports and reviews, including the NDIS Review and the final report of the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability. The Draft Strategy notes that 'Action Plans' detailing policy initiatives will be released iteratively in collaboration with the state and territory governments (where appropriate) which will detail the practical steps towards achieving the Draft Strategy's objectives. We assume that these Action Plans will be amended as required in this iterative fashion to adopt various recommendations from various parallel reviews currently underway. This Horizon is to occur by June 2024.
  • Horizon 2 Action Plans: This includes 'innovation', pricing and market design, transparency and the implementation of Horizon 1 and 2 initiatives. This Horizon is to occur by June 2026.
  • Horizon 3: Horizon 3 includes new policy priorities and new action plans. Limited detail is provided in this Horizon given it is not set to occur until June 2033.

While the content for these Horizons is broad, three 'goals' are specified in the Draft Strategy which will achieve the Government's vision for a 'sustainable and productive care and support economy that delivers quality care and support with decent jobs.' These include:

Goal 1: Quality care and support

This goal articulates the policy aim of '[providing] person-centred services that recognise those accessing care and support as individuals and deliver quality outcomes'. A few highlights from this goal are outlined below.

The Draft Strategy speaks to the importance of universality of access for those in need of support from the Care Sectors. It also acknowledges the importance of migration in being 'part of the solution to workforce shortages' in the Care Sectors while acknowledging that growing the Care Sector workforce will be an ongoing priority for the government. The Draft Strategy specifically indicates a desire the build upon existing initiatives such as fee-free TAFE places for professions involved in the Care Sectors.

There will be a greater role for digital platforms in navigating the Care Sectors to improve access to quality care, support and inform consumer choice.

Providing quality care and support in 'thin markets'. The Draft Strategy proposes that this may occur through 'integrated commissioning where providers are funded to deliver cross-sectoral services' which may be supported by providers delivering 'health, aged care and disability support…[which will permit providers to] reach a sufficient number of clients to make service delivery cost effective. This requires government departments to pool funding and adjust regulatory requirements.'

Enhanced support for 'informal carers' and a greater recognition of the role that they play in the Support Sectors will be a priority.

Goal 2: Decent jobs

The policy aim of this goal is to 'secure, safe jobs with decent wages, conditions and opportunities for career development'. Highlights include:

  • The Draft Strategy recognises the need to improve conditions, pay and the value the community places in the Care Sectors. The Draft Strategy notes that there has already been progress made in this area through the government committing to funding a 15 per cent pay rise for aged care workers in direct care roles, but also confirms that 'addressing the issue of low wages' will be a continuing priority.
  • Improved worker conditions in the Care Sector will be achieved through a 'Priority Workforce Initiatives Action Plan' which will outline initial steps the Australian Government will take towards improving the conditions for workers in the Care Sector.
  • The Draft Strategy notes that the government is 'committed to preferencing direct employment in aged care'. However, it is not clear from the Draft Strategy how this objective will be achieved or incentivised through government policy.
  • Creating a safe and inclusive workplace, through improving the safety of workers in the Care Sector will be a priority, along with reducing racism and sexual harassment of workers. The Draft Strategy anticipates that this will be addressed through a Worker Safety Action Plan to be developed with state and territory governments.

Goal 3: Productive and sustainable

The policy aim of this goal is to establish 'a care and support economy that has functioning markets, sustainable funding and generates productivity gain'. Highlights from this goal include:

  • The Draft Strategy notes that a Pricing and Market Design Action Plan will be developed to better align incentives and contribute to well-functioning care and support markets. This will be informed by expert advice on market design and, rather than being a one-time policy change and will require monitoring market responses to incentives. References to the 'long-term sustainability' of the Care Sector indicate a willingness to consider a role for a 'user pays' model based on a 'person's capacity to pay'.
  • An Innovation Action Plan and a Data Standards Action Plan will be developed to examine and implement productivity enhancing measures in the Care Sectors.
  • Regulatory duplication and burden will be reduced, without compromising quality and safeguards. Opportunities for 'regulatory harmonisation will be considered and investigated'.

These goals indicate an ambitious reform agenda which indicate the shape of things to come for stakeholders in the Care Sectors. The Draft Strategy closes with a series of questions aimed at initiating a 'national conversation' about the expectations on government-funded service provision and the relative contribution between governments and individuals. These questions are outlined below.

  • What is the appropriate level of service governments should fund? What level of care and support do people need, which might be different from what they want?
  • Should governments fund a universal, minimum standard of care and support, but allow people to purchase a higher level of care and support where they are able to? If so, what is the minimum standard of care and support governments should fund?
  • More broadly, what is the appropriate mix of funding for quality services between government and individuals (noting this is likely to vary between specific services)?
  • If Australians as a whole do expect the government to fund a high level of care and support services, would they accept an increase in taxation or a reduction in other government services to pay for this?

Public submissions on the Draft Strategy are open until 11.59 pm 26 June 2023. Given the significance of these reforms proposed, many stakeholders in the human services sector will likely be contributing to the consultation process.

We would be very happy to discuss the Draft Strategy with you and what it means for your business.

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https://www.minterellison.com/articles/draft-national-strategy-for-the-care-and-support-economy