Australia’s aged care system is facing a severe capacity collapse, with a new industry report revealing that just 578 new residential aged care beds were added nationwide in the last financial year — even fewer than the 800 claimed by the federal government, and drastically short of the 10,600 beds needed annually to meet demand.
The analysis, conducted by specialist consultancy Boxwell & Co, shows that three states — NSW, Tasmania and Western Australia — experienced a net loss of beds, with supply falling by 203, 54 and 119 beds respectively. Queensland recorded a minimal increase of 26 beds, South Australia added 58, while Victoria was the only state with significant expansion, recording 870 additional beds.
The findings confirm that Australia’s aged care system has entered a critical tipping point, with national occupancy rising to 94.4 per cent and full capacity projected within three years. In several regions, older Australians already have no immediate access to residential care.
Boxwell & Co warn that, without urgent intervention, the nation faces a shortfall of 18,000 beds per year by 2030, driven primarily by escalating capital costs that make new development financially unviable. “Returns per bed need to be much greater,” the report notes, if providers are to build enough facilities to meet surging demand.
The release of the report has triggered fierce political backlash. Shadow Health and Aged Care Minister Anne Ruston condemned the situation as a “national disgrace”, accusing the Albanese government of delivering just five per cent of the required new places last year and leaving 238,000 older Australians waiting for home-care support.
“The result is devastating,” Ms Ruston said. “Older Australians are languishing in hospital beds with nowhere to go, surgical waitlists are blowing out, and ambulances are ramped for hours.”
The crisis has also placed enormous pressure on state health systems. South Australian Health Minister Chris Picton said aged care facilities in his state are 99 per cent full, forcing authorities to transfer medically stable older patients to a five-star hotel simply to free hospital beds.
Mr Picton and his NSW counterpart this week highlighted the case of 80-year-old Anna Romanik, who has advanced dementia and has applied to 21 aged care facilities without securing a place. She is currently stuck in a hospital bed, with no residential care option available.
Responding to the report, Aged Care Minister Sam Rae acknowledged that many facilities are ageing and the sector’s access to capital is constrained, though he insisted viability has improved and confidence is slowly returning. Rae told industry stakeholders that the government wants “more developers and financiers to step forward”, and confirmed that an independent review is underway to assess whether accommodation pricing in residential care is fair.
“The review will examine how we can better balance affordability for residents with the incentives providers need to invest in high-quality accommodation,” he said.
The government has also pledged to deliver 83,000 Support at Home places by the end of this financial year — a target now under scrutiny as residential and home-care shortages converge into what experts warn is a nationwide care bottleneck.
