Thinking | 12 May 2021

Federal Budget 2021-22: what does it mean for the health, aged care, lifesciences and disability sectors?

By Alison Choy Flannigan

The health and aged care sector was the recipient of significant funding in the Federal Budget (including the $17.7 billion aged care package), while substantial funding was also allocated to assist with the response to the COVID-19 pandemic. We break down what the Budget will mean for the aged care, health, lifesciences and disability sectors.

Aged Care

  • The Australian Government has announced its response to the Royal Commission into Aged Care Quality and Safety on 11 May 2021, adopting many of the recommendations as part of the Federal Budget.
  • The Government announced a $17.7 billion aged care package, spent over five years and including 80,000 extra home care packages.
  • Treasurer Josh Frydenberg said this would make a total of 275,000 packages available. The present waiting list is 100,000.
  • The aged care package is designed as long term structural reform after the Royal Commission found the system in a parlous state and needing a comprehensive overhaul.
  • We will increase the time nurses and carers are required to spend with their patients,’ Mr Frydenberg said. This will be mandated at 200 minutes per day, including 40 minutes with a registered nurse.
  • The Government will make an additional payment of a $10 Basic Daily Fee Supplement per resident per day to enhance the viability and sustainability of the residential aged care sector and will continue the 30% increase in the homelessness and viability supplements.
  • We will support over 33,000 new training places for personal carers, and a new Indigenous workforce.’
  • We will increase access for respite services for carers.’
  • We will strengthen the regulatory regime to monitor and enforce standards of care.’

The Government has announced as part of the package:

  • $26.7 million over four years to develop a new Aged Care Act.
  • $21.1 million over four years to establish the National Aged Care Advisory Council.
  • $6.5 billion over four years to release 80,000 additional home care packages over two years from 2021-22.
  • $798.3 million to provide greater access to respite care services and payments to support carers.
  • $272.5 million over four years to support senior Australians to access information about aged care, navigate the aged care system and connect to services through the introduction of dedicated face to face services.
  • $365.7 million to improve access to primary care and other health services in residential aged care.
  • $301.3 million, primarily for the Aged Care Quality and Safety Commission.
  • $200.1 million for a new star rating system to provide senior Australians, their families and carers with information to make comparisons on quality and safety performance of aged care providers.
  • $78.4 million for Dementia Behaviour Management Advisory Service and the Severe Behavioural Response Teams to strengthen the regulation of chemical and physical restraints and to further reduce the reliance on these restraints.
  • $3.9 billion over five years from 2020-21 to increase the amount of front line care (care minutes) delivered to aged care residents and who access respite services by 1 October 2023. This will be mandated at 200 minutes per day, including 40 minutes with a registered nurse – it still remains unclear if this is on average or per resident.
  • $279.8 million over three years from 2020-21 to further support residential aged care providers through the continuation of temporary financial supports and the Viability Fund.
  • $189.3 million over four years from 2020-21 to implement the new funding model, the Australian National Aged Care Classification (AN-ACC).
  • $117.3 million to support structural reforms, including discontinuing of the current bed licence and the Aged Care Approval Round process from 1 July 2024 and the implementation of a new Refundable Accommodation Deposit (RAD) Support Loan Program, including strengthened financial reporting requirements for residential aged care providers.
  • $49.1 million for the current independent hospital pricing authority to help ensure that aged care funding is directly related to the cost of care.
  • $216.7 million over three years from 2021-22 to grow and upskill the workforce and enhance nurse leadership and clinical skills through additional nursing scholarships and places in the Aged Care Transition to Practice Program, to provide more dementia and palliative care training for aged care workers and to recruit aged care workers in regional and remote areas.
  • $228.2 million to support the establishment of a single aged care assessment workforce for residential aged care from October 2022 and home care from July 2023.
  • $106.5 million to introduce national consistent worker screening, register and code-of-conduct for all care sector workers including aged care workers.
  • $91.8 million over two years from 2021-22 to support the training of 13,000 new home care workers.
  • $9.8 million over two years from 2021-22 to extend the Care and Support Workforce national campaign.

In addition, from 5 January 2021, work limitation conditions placed on student visa holders have been temporarily lifted to allow these visa holders to work more than 40 hours per fortnight building on previously provided arrangements for students working in the health and aged care sector.

Health

  • COVID-19: The Government will provide $845.3 million over two years from 2020-21 to support the Government’s emergency response to COVID-19.
  • Funding includes:
    • $487.0 million over two years from 2020-21 to expand quarantine services in the Northern Territory. The cost of this measure will be partially recovered from people who quarantine at this facility.
    • $271.5 million in 2020-21 to extend activities under the National Partnership on COVID-19 Response.
    • $86.8 million over two years from 2020-21 to expand activities of the National Incident Centre and to support the National Medical Stockpile.
  • COVID-19 vaccines: The Government will provide $1.9 billion over five years from 2020-21 to distribute and administer COVID-19 vaccines to residents of Australia.
  • Medicare and private health insurance – the Government continues to support Medical and private health insurance including:
    • $5.1 million over four years from 2021-22 to support the introduction of an improved certification process when admitting patients to hospital;
    • $1.1 million over two years from 2021-22 for an independent study to investigate private hospital default benefit arrangements;
    • $0.9 million over two years from 2021-22 to improve Private Health Insurance program modelling capabilities.
  • Mental health: The Government will provide $2.0 billion over four years from 2021-22 for the National Mental Health and Suicide Prevention Plan, including initiatives to be progressed with states and territories for a new national agreement on mental health and suicide prevention.
  • Women’s health: The Government will provide an additional $148.0 million over five years from 2020-21, and $4.2 million in 2025-26 for health care services for women, including BreastScreen and the National Cervical Screening Program.

Lifesciences

  • Patent box – The Government is encouraging investment in, and the retention of, Australian medical and biotech technologies by introducing a patent box. Over 20 countries currently have patent boxes, including the UK and France. From 1 July 2022 the patent box will tax income derived from Australian medical and biotech patents at a 17 per cent effective concessional corporate tax rate. Normally corporate income is taxed at 30 per cent or 25 per cent for small and medium companies. Only granted patents, which were applied for after the Budget announcement, will be eligible. The patent box encourages businesses to undertake their R&D in Australia and keep patents in Australia. The Government will follow the OECD’s guidelines on patent boxes to ensure the patent box meets internationally accepted standards.
  • The Government will provide funding to the Department of Industry, Science, Energy and Resources to work with the Department of Health to develop an onshore mRNA vaccine manufacturing capacity in Australia.
  • Prostheses List – The Government will provide $23.1 million over four years from 2021-22 (and $21 million per year ongoing) to modernise and improve the administration of the Prosthesis List.
  • The Government will provide $878.7 million over five years from 2020-21 for new and amended listings on the PBS, the Repatriation PBS and the Stoma Appliance Scheme. This includes cannabidiol (Epidyolex) from 1 May 2021 for the treatment of Dravet syndrome (rare, genetic epileptic encephalopathy that gives rise to seizures).
  • The Government will provide a further $10.4 million over four years from 2021-22 for medical research in Australia, including $6.0 million to extend the National Partnership Agreement, encouraging more clinical trials in Australia and removing barriers for conducting clinical trials.

Disability

  • The Government will provide $12.3 million over two years from 2021-22 to improve alignment of regulation across the care and support sector. This includes facilitating greater information sharing between regulators, alignment of auditing arrangements and compliance and enforcement powers, review of the NDIS Quality and Safeguard Framework and consultation with the sector around options for further reform to align regulation and safeguards.
  • $12.7 million to support initiatives to improve health services for people with an intellectual disability.
  • The Government will extend the National Disability Insurance Scheme Jobs and Market Fund (JMF) to 30 June 2024 and expand the scope of the JMF to implement initiatives that support the broader care and support sector market and workforce.
  • The Government will provide $17.9 million over four years from 2021-22 to establish a new Early Childhood Program. The program will deliver a range of disability-specific information, workshops and supported playgroups for young children aged 0 to 8 years with disability or developmental needs.

Commentary

Overall, the Federal Budget announcements for the sector are commendable; however, the devil will be in the detail of implementation.

Read our full Federal Budget 2021-22 coverage by our team of experts.

Contact

Alison Choy Flannigan

Alison Choy Flannigan

Partner & Leader, Health & Community

With over 25 years of corporate, commercial and regulatory experience, Alison has specialised in advising clients in the health,...

Karl Rozenbergs

Karl advises his clients in adverse action claims at the Fair Work Commission, implementing and negotiating enterprise agreements, unfair...

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