The Victorian Healthcare Association (VHA) has welcomed the Federal Government’s $300 million funding boost for residential aged care capital infrastructure and looks forward to more detail on eligibility criteria to ensure Victoria’s public funded residential aged care services receive a fair share of the funding boost.
The Federal Government has opened a new round of the Aged Care Capital Assistance Program. This grant opportunity intends to support aged care providers to build, extend or upgrade services or staff accommodation in regional and rural locations. It aims to improve access to aged care services in ‘thin markets’ – locations where there are often insufficient providers to meet community demand.
The VHA’s 2025-26 Federal Budget submission called for the Federal Government to invest $200 million for aged care capital infrastructure, and therefore the VHA welcomes the commitment by the Federal Government. A similar ask for $80 million over 4 years is also reflected in the VHA’s State Budget submission. These investments will support aged care providers to meet increasing community demand, with estimates indicating the nation will need at least 40,000 additional beds by 2030.
VHA CEO Leigh Clarke said ‘We are pleased to see this announcement that goes above and beyond the VHA’s budget ask and will make a meaningful contribution to ensuring aged care infrastructure is upgraded and enhanced where it is needed most. We applaud this investment, that builds upon the $966.5 million made available over four years to 2028.’
'While this announcement is welcomed, the requirements to provide a cash co-contribution to cover at least 50% of the cost places significant restriction on the sector accessing much needed funding to maintain and upgrade facilities.
'This requirement in the eligibility criteria is disappointing, particularly as aged care is an area of high growth. There should not be any unnecessary barriers to upgrading much needed capital infrastructure in rural and regional locations across Victoria and Australia. Public providers are in a vastly different position to the private sector in their ability to both raise and access capital funding – this criteria leaves them at a disadvantage.'
Ms Clarke said Victorian publicly funded residential aged care providers fill a critical gap in providing high-quality, and often complex, care to elderly Australians living in regional and remote locations. This is often delivered through small public hospitals to provide care tailored to local community need.
‘Victorian publicly funded aged care providers occupy a unique space in addressing private market failure. These providers deliver 10% of the state’s residential aged care capacity, with the majority of beds located in rural and regional areas, within Victoria’s public hospitals. The scale of support these services provide to Victoria’s rural and regional communities demonstrates the need for appropriate investment.’
Ms Clarke said that Victorian publicly funded aged care providers are keen to carry out vital building upgrades, purchase new equipment and modernise facilities.
‘Capital funding arrangements need to reflect growing demand for services in regional and rural locations across Victoria, and the important role our public services play as part of the aged care ecosystem. This investment will ensure facilities can continue to meet public need, and support elderly Australians to receive care in their local community.’
In 2024 – $250 million in funding was allocated to a total of 52 projects, of which only 11 were Victorian providers. Victoria received just over $11 million across 11 applications, compared to $64 million for NSW for 16 applications and $46 million in Queensland for 7 applications. Of these 11 Victorian providers, only a handful were publicly funded aged care providers, with the majority of the investment into private providers. This further exacerbates the inequity for rural and regional Victorians that have a greater reliance on public providers to meet the needs of their communities.
Ms Clarke said the VHA looked forward to seeing further outcomes to future-proof the health sector when the Federal Government hands down the 2025-2026 Federal Budget on 25 March. The VHA's solutions to enable a better healthcare system are detailed in our Federal Budget submission.
‘The VHA calls on both major parties to commit to bi-partisan support across aged care capital funding to meet increasing the increasing demand for care experienced by Victorians living regionally.’
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For further information contact:
Toli Papadopoulos, Senior Public Affairs Advisor
toli.papadopoulos@vha.org.au
0408 851 302
Visit our website: www.vha.org.au