Probably the biggest parliamentary story of the week has been Labor giving in to pressure from the Coalition, Greens and independents to immediately fund 20,000 more home care packages to support older Australians living at home.
This is good news, and recipients of these packages will definitely benefit.
But while we’re focused on “how much” we spend on aged care, we sometimes miss a key reason why the sector keeps failing: we rely on the private sector to deliver public services.
Last year, David Richardson, Richard Denniss and I wrote a submission to the Productivity Commission outlining how decades of scandals and failures in sectors ranging from aged care to electricity were entirely predictable. This is because these sectors do not meet the Economics 101 requirements for a well-functioning market.
Instead of endless Royal Commissions and other inquiries, the government needs to recognise that there are some things only the public sector can do well and take proper responsibility for sectors like aged care.
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And now their excuse is that these private systems are too big to be allowed to fail. It would take a decade to transfer all the services back into public hands. Given Labor have potentially another two terms in government now is the time to get cracking. Start making inroads in childcare, aged care, and employment services. Back in the not-for-profits and make it impossible to make money out of peoples care needs.