Aged care sector faces financial survival and workforce pressures

The Australian aged care sector is facing significant financial and operational challenges. At the StewartBrown 2026 Finance Forum, senior partner Stuart Hutcheon warned that the sector is in a state of financial survival, noting that many providers have regressed to the financial positions seen in the 2022 financial year.

Hutcheon highlighted a growing gap between demand and capacity, stating that the government's goal of adding 10,000 beds annually is likely unachievable. He suggested that a robust Support at Home system is essential because residential bed capacity will remain insufficient. Notably, the home care sector's financial position has turned negative for the first time.

Simultaneously, providers are struggling with workforce pressures and rising labor costs, which account for 50–60% of total expenditure. New regulatory requirements, such as the mandatory Care Minutes Performance Statement starting in the 2025-2026 financial year, add further compliance burdens. There are also concerns regarding the skills mix, as a focus on registered nurse minutes may lead to a reduction in experienced enrolled nurses, potentially impacting the overall quality of resident care.