The Guardian • Issue #2022

Nationalise aged care!

The aged care crisis

Part 2

  • by Anna Pha
  • The Guardian
  • Issue #2022

Photo: Claudia Love –

How does a non-profit charitable organisation that is sixty-nine per cent funded by government, and claims to operate at a loss, find $1.4 billion to acquire competitors, develop new properties, and expand its residential aged care business offshore?

This is one of many questions raised in the Centre for International Corporate Tax Accountability & Research’s (CICTAR) Report, Careless on Accountability: Is Federal Aged Care Funding Syphoned Away? The report provides case studies of large Australian aged care operators that demonstrate the urgent need for government reforms to require transparency and public accountability on how federal aged care funding is spent.

CICTAR’s revelations are alarming and confirm information given by BDO Australia, a tax advisory company, to the aged care royal commission that the “current model favours more sophisticated providers who have the necessary financial acumen to manage diverse portfolios and capital structures.”

“This would indicate that unlisted [on the stock market] for-profit approved providers behave quite differently from their counterparts,” BDO said. “For example, they may be distributing a higher proportion of profits out of the entity and retaining less.” As a result, there is little or no public accountability or transparency regarding the use of public funding and profitability.

In a similar manner to other large corporations, a company creates artificial divisions between the operational, property, and finance components, allowing a transfer of artificially high rents and other payments to related companies. These may be based in offshore tax havens, leaving the operating company with a low income or even a deficit, few if any assets, while evading taxes on profits.

And it is not just the privately owned, for-profit providers who have opaque structures.


Take Bolton Clarke. In just five years Bolton Clarke built the largest not-for-profit aged care empire in Australia. It paid $700 million to purchase Allity, a private equity owned company with a chequered history of care, including notices from the aged care quality regulator.

The not-for-profit, tax-exempt charity also managed to find another $700 million for a “development pipeline” and investments in China. Due to lack of transparency and accountability, there is no way of knowing whether this $1.4 billion was syphoned off from federal aged care funding.

In the year prior to the $1.4 billion in investments Bolton Clarke received $356.7 million in revenue from governments, constituting sixty-nine per cent of the group’s total income and the group reported a loss of $16.9 million.

Even more intriguing is how the Bolton Clarke Group of companies now has investments in the United Kingdom, Ireland, New Zealand, and China. In 2019, Bolton Clarke’s subsidiary RDNS Hong Kong signed an agreement with real estate giant Yango Holdings in Shanghai in September to commission and manage 3,490 residential aged care beds. The first project, a 200-bed residential aged care site in Xuhui district, opened in 2020. Bolton Clarke Group CEO Stephen Muggleton said China offered enormous opportunities and challenges for Australian aged care providers, with a population tipped to reach 1.4 billion people next year. By 2050 about 400 million will be over sixty-five. Aged care is big business!

There is no point in looking for details of Bolton Clarke’s international investments in its financial statements. You won’t find them.

“While many non-profit aged care entities seek to provide the best care with available resources, many of the largest non-profit aged care operators were also found to be using public aged care funding to buy property and grow the business at the expense of quality care for residents and decent wages and conditions for workers.” (CICTAR)

How does a not-for-profit charitable organisation do this?


How could the charitable, non-for-profit Little Company of Mary Health Care Ltd, a large Catholic healthcare operator, better known as Calvary, find $380 million to buy up the residential aged care provider Japara? Where did this money come from? Especially when it had reported a deficit that year of $24 million. At the time it was predominately a provider of residential aged care.

Calvary also holds $313 million in refundable resident loans from both residential aged care and independent living units in its retirement villages. It’s big business.

“While the specific source of funding for the Japara acquisition is unclear, it is clear that this non-profit has generated the capital – presumably through the provision of public services, heavily underwritten by the public purse – to make this investment. Now complete, the takeover means that the reporting requirements for the new entity, as a private non-profit, are far lower than they were for Japara as a public listed company. Transparency has been diminished.” (CICTAR)


Menarock Life purchased Greenway Gardens in early 2018. The year before the purchase, the facility’s previous owners paid just $70,000 in rent. The royal commission heard that it was paying $350,000 in rent following the takeover! At the same time, it was reportedly understaffed, and care was inadequate according to evidence given at the royal commission.

When questioned at the royal commission, Menarock’s director, Craig Holland admitted that “The [aged-care] business operates through one legal entity and the property is held in another legal entity.” He explained how there was a holding company that was not a trading entity at the head of a corporate group. That the losses at Greenway Gardens for 2018 and 2019 were due to related party loans to the facility.

It’s big business!


Blue Care, a not-for-profit, charitable residential aged care provider is part of Uniting Care Queensland (UCQ). It is the largest aged care provider in Queensland, and also runs private hospitals. It had total gross income of over $1.7 billion in 2020-21 ($696.7 million for aged care), including $662.3 million in government grants, and held nearly $2.3 billion in assets.

It’s big business!

Last year, Blue Care paid $28 million directly to the Uniting Church Queensland, for various fees and services including insurance premiums, a “Stewardship fee,” “Chaplaincy services,” and $3 million for compensation of the Church’s victims of child sex abuse. That does not include the $292.6 million in cash held on deposit held by the Uniting Church Investment Services.

“There is a disturbing lack of transparency in the financial flows between this heavily government subsidised non-profit and the church entities which control it. There appears to be no restriction on using federal aged care funding, or other public funds, to reach settlements with victims of child sexual abuse within the Uniting Church in Australia.” (CICTAR)


“Quality LTC [long term care] is a matter of life and death; it is an essential service that is too important to leave in the hands of those whose primary motivation is the extraction of profit. Quality of care relies on well paid, trained, and supported workers – which the profit motive inevitably undermines. A new model of care is urgently needed which prioritises caring for people.” (Public Sector International)

It is evident from the findings of the royal commission report and the many reports that preceded it that the aged care system needs fundamental reform to become based on needs where care is the priority.

Just increasing funding is pointless without strong regulation, accountability, and transparency relating to finances, management, and care, otherwise resources will continue to be syphoned off to CEOs, shareholders, and churches. Privatisation must be reversed and halted. Australia’s ageing population needs a quality aged care system based on universal access to meet needs.

Aged care, with its predominantly low paid, casualised female workforce is undervalued, undertrained, and is expected to work in poor conditions on low wages. Until this is reversed the exodus will continue. A survey conducted for the Australian Nurses and Midwifery Federation in February 2022 found that thirty-seven per cent of aged care workers plan to leave their job within one to five years and an alarming twenty-one per cent within the next twelve months.

At the very minimum:

  • Staff receive equal pay for work of equal value
  • Make permanent work the standard
  • Introduce staff-to-patient ratios to reduce workloads and enable quality care
  • Registered nurses on every shift
  • Mandated number of care minutes
  • Improved working conditions negotiated through union industry bargaining
  • Appropriate training of all staff with the abolition of university and TAFE fees and adequate income support while training
  • Giving staff, residents and their families greater involvement and say in the running of centres
  • Regulation for higher standards, including measures to inspect and enforce them
  • Full accountability and transparency
  • Releasing more home care packages
  • Construction by governments of more residential aged care centres
  • Centralised funding through a progressive tax system.
  • These necessary and urgent reforms can only be achieved by a nationalised system with universal access and by abolishing deposits and hefty daily or weekly payments, and a system based on care not a “care economy” or big business.

There is NOT a shortage of money to fund these reforms. It is a question political will and priorities. Should hundreds of billions of dollars be spent on war preparations? Should tens of millions of dollars be spent on subsidising private hospitals, fossil fuels, superannuation tax rorts, and tax cuts for the rich? Or should this money be spent on building and running aged care centres and meeting other social needs of society?

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