The PSI reports found Australia has a “systemic” aged care crisis where private provision and financial engineering allowed companies to hoover off massive amounts of government funding at the expense of care.
The reports found that Australia’s largest for-profit aged care companies are not accountable for the billions in public funding they receive, and instead prioritise financial returns above elderly care.
They found that the six largest for-profit providers were running more than a fifth of all residential aged care beds and were getting nearly $2.2 billion in annual government subsidies. They then used complex corporate structures, often via tax havens, combined with internal transactions, to lower reported profits and reduce their tax bills.
One company, Opal, paid $2.4 million in tax over two years while paying out an estimated $62 million in dividends. Another company, Allity, told a Senate hearing in 2018 that a loan from shareholders charged at 15 per cent annually was “market rate”.
The nine largest “not-for-profits” received $4.4 billion in gross income in 2019 from government funding, residents’ fees and other sources, and received an average A$66,000 in government subsidies per care place.
PSI says public sector facilities in Australia have been much safer than those run by private organisations during COVID.
Australian Financial Review reported in July that of the 35 COVID-19 deaths in care homes in the state of Victoria, all of them had occurred in privately run care homes – even though Victoria has over 180 publicly run care homes.