The Aged Care Association welcomes the establishment of the new Aged Care Advisory Group and is pleased to see the Group beginning its work.

The creation of an Advisory Group to provide system-level advice on aged care is something the Association has actively called for, and we welcome the Minister’s acknowledgement that reform of the aged care funding model is required.

Funding reform is a critical part of the Advisory Group’s work but it cannot be the only focus if meaningful and lasting change is to be achieved.

Successive government-commissioned reviews have already reached the same conclusion: the current aged care funding model is broken. From the Association’s perspective, this part of the problem is well understood and relatively straightforward to resolve - the Government should fund the full cost of assessed clinical care delivered on its behalf. That is the social agreement New Zealand has with its older citizens and residents.

What must now also be addressed is the outdated system that sits underneath that funding.

The Age-Related Residential Care (ARRC) Agreement - including the A21 process - was written in the 1990s for an aged care environment that no longer exists. It has been patched and amended for close to 30 years, but it is no longer fit for purpose. The Advisory Group is well placed to advise the Minister on how New Zealand moves away from this legacy contracting framework and toward a modern, nationally consistent agreement that reflects today’s clinical realities and care complexity.

This is where recognising that " aged care is health care" becomes essential.

With the right system settings and evidence-based resourcing, the aged residential care sector could play a far greater role in relieving pressure across the wider health system. A standard nationwide agreement and realistic funding would enable providers to expand recovery and return-home services, reduce delayed hospital discharges, and allow emergency departments to move patients into hospital wards more quickly along with their current role of long-term care to approximately 20% of over 85-year-olds.

Similarly, a nationally consistent, properly funded approach to respite would allow care partners - particularly those supporting people living with dementia - to sustain care at home for longer. Revolving, trusted respite arrangements help families build relationships with local facilities early, reducing fear, guilt, and distress when higher levels of care are eventually needed.

The aged care sector is ready to be part of the solution. Our members already deliver complex clinical care every day, often in place of hospital services, but within a system that has not kept pace with demographic change, clinical complexity, or the realities of modern care delivery.

The Aged Care Advisory Group has an opportunity to look beyond incremental fixes and provide advice that supports genuine system reform - reform that benefits older New Zealanders, their families and whānau, and the wider health system.

We look forward to working constructively with the Advisory Group and the Minister to achieve that outcome.

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