Policy goal: a care and support economy that has functioning markets, sustainable funding and generates productivity gains
Our policy vision is that good quality care and support is delivered effectively and that there are sufficient providers of the services that people need. Government investment in and regulation of the care and support economy need to incentivise providers to deliver quality care and support with decent jobs. Government investment needs to be sustainable and ensure fairness both to current and future generations.
It is important that we meet our nation’s growing and evolving care and support needs without leaving future generations of taxpayers with unmanageable debt. Achieving this long-term sustainability vision requires Government investment to be both effective and efficient, and will require productivity growth across the care and support economy.
Given that the care and support economy relates to services provided, in most cases, via markets (or quasi-markets), it is important that these markets function well. While this does not mean that every provider should remain viable, it is important that there are sufficient providers able to deliver services to people needing care and support both where and when they need them.
As the Australian Government is both the regulator (or joint-regulator) and, to a large extent, funder of these services, it needs to be a good steward of care and support markets. The Government has ultimate control over a variety of settings that influence care and support markets, including funding arrangements, pricing, regulation and industrial relations settings. These different elements interact in complex ways to influence and incentivise the behaviour of consumers and their families, providers and workers. Good stewardship involves ensuring that these factors work in concert to enable and incentivise high quality care and support and decent jobs, all provided in a sustainable way.
Effective regulation is a careful balancing act. Overly restrictive regulation can be too rigid to suit every situation and can lead to inefficiencies. For example, when regulation mandates what type of organisation can deliver care and support and the specific way workers must achieve this, the result can be lost opportunities for new and different approaches to service delivery. On the other hand, too little regulation, or regulation that is unclear or poorly targeted, can lead to poor outcomes for people accessing care and support. Considerable effort has gone into ensuring regulation is fit for purpose over recent years. For example the National Quality Framework which governs ECEC has been reviewed twice in its first decade to ensure it continues to meet its objectives. Building upon the existing regulatory approaches in these sectors, continued work is needed to ensure that regulatory settings ensure quality care and support without creating an unnecessary burden or restricting innovations in quality and service delivery.
The expansion of services and move to consumer-centric models of care and support, regulation that ensures safe and quality care and support, and better pay and conditions for care and support workers are all important. These changes serve the best interests of those providing and receiving services and society more broadly. However, these changes can also drive up the cost of services, creating challenges for the sustainability of public funding.
A productive and efficient care and support economy will help ensure that Government funding is sustainable, now and into the future. However, while productivity gains are important, they will not completely address the significantly increasing cost of care and support.
Future policy work needs to consider the appropriate level of care and support the Government funds, the level of funding, and the relative financial contribution of the Government and individuals needed to deliver the quality services Australians rely on.