Treasurer Jim Chalmers concedes Australia's aged care regime remains a mess, with new analysis showing seven out of 10 providers are posting financial losses.
It has led to opposition accusations the government is "abandoning" older Australians and calls for a plan for how it will deal with the possible closure of facilities.
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Aged care centres lost $21.29 a bed a day on average over the September quarter compared to $7.30 over the same period 12 months earlier, according to a new survey.
The latest StewartBrown aged-care financial performance survey sector report, which analyses records from 1182 of Australia's more than 2500 nursing homes, found 70 per cent of aged care homes ran at a loss over the third quarter of 2022.
That was up from 56 per cent in the 2021 September quarter.
"Staffing shortages have been a major contributing factor, with much increased levels of overtime and agency staff being required to ensure that resident care needs are being properly met," said the report, published by The Australian.
Occupancy rates have dipped from 95 per cent in 2018 to 91 per cent in September 2022 and the report calls for extra funding and long-term reform to address the crisis.
Dr Chalmers said Aged Care Minister Annika Wells and Health Minister Mark Butler were working to improve residential aged care after boosting funding 12 per cent for the 2022/23 financial year.
"Aged care has been a mess for some time and what we're trying to do in the Albanese government is to clean it up," he told ABC Radio National.
Dr Chalmers' first budget as treasurer in October set aside an extra $2.5 billion over the four years for aged care sector reforms, including better food for residents and increasing the on-site hours of registered nurses.
Deputy Liberal leader Sussan Ley said if homes lacked financial viability they would eventually close, representing the government "abandoning our older Australians".
"What happens if your aged care home closes? What happens to those frail and vulnerable Australians when there's no other aged care residential facility to take them?" she told reporters.
"We're calling for (a) plan that demonstrates this government will look after those people."
Aged and Community Care Providers Association chief executive Tom Symondson said the numbers in the analysis equated to an annual loss of $1.4 billion for the industry.
"It's not chickenfeed. It's a very significant number," the head of the peak body told ABC Radio National on Friday.
"Aged care has been under huge pressure for years - decades, in fact."
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