The Royal Commission into Aged Care must address the complexity of income and assets tests for older Australians, former federal treasurer Peter Costello says.
- The royal commission heard there are over 120 questions to fill in for the income and assets test
- Former federal treasurer Peter Costello said he had trouble filling the forms in
- The inquiry heard that a special levy should be earmarked for a baby boomer ‘bulge’
The commission is looking at how to fund the future of aged care as demand swells due to increasing longevity and an ageing population.
Mr Costello told the inquiry that income and assets tests should be part of future funding arrangements, but need to be simplified.
He said he had trouble filling out aged care forms for his family.
“You all ought to do them you know, I think there are over 120 questions and 27 pages — I had a lot of trouble filling it in,” he said.
“I’m not being disparaging of the public servants on the other side of the equation, they’re not financial advisors.
“We’re having trouble filling it in, [and] they’re having trouble reading and understanding it, I can tell you.”
Echoing his sentiments, former Treasury secretary, Ken Henry, has told the inquiry people entering the aged care system were “bewildered” by its complexity.
Mr Henry said he was concerned in 2009 when he delivered his landmark tax review, and remained concerned today.
“The system overall is horribly complex and it contains a very high level of uncertainty for people who are elderly, people who are vulnerable, people who are suffering emotional and psychological stress … and they’re bewildered.”
“I also thought this system is unsustainable, it’s underfunded, it’s under resourced, and it will not be tolerated by the baby boomers themselves, when they find themselves in this system.”
Mr Henry said there was a good case for a special levy earmarked to pay for the baby boomer bulge in aged care, expected to peak in 2030.
Mr Costello was asked whether the $160 billion Future Fund should be used to get over the bulge.
He said the fund, which matures this year, was Australia’s biggest and best performing asset in difficult financial times.
“It actually is very good financial sense to keep it running on,” he said.
“Because the Commonwealth is doing much better if it’s borrowing at 1 per cent and getting income returns at 4 per cent — so it wouldn’t be the time to do it now”.