Australia’s top for-profit aged care providers have posted large profits while taking advantage of $2.17 billion in Australian taxpayer funded subsidies, according to a new report commissioned by the Australian Nursing and Midwifery Federation (ANMF).
On Tuesday, the report’s author Jason Ward gave evidence to the Senate Economics Reference Committee, which is currently investigating the financial and tax practices of Australia’s for-profit aged care providers.
The report, Tax Avoidance by For-Profit Aged Care Companies, revealed how the top six providers, some with foreign ownership, used various loopholes, corporate structures and discretionary trusts to avoid paying their fair share of tax.
“Most people would have a hard time believing the claims by the largest for-profit aged care companies that they are fully transparent and solely dedicated to providing high quality care,” Mr Ward said.
“The aged care sector will need additional public funding, but there needs to be greater accountability to ensure better staffing levels and care rather than lining the pockets of executives and investors.
“While the aged care companies have attacked the report, they have not acknowledged clear examples of questionable tax practices. These include Allity’s loan from shareholders at a 15 per cent interest rate and the ATO’s audit of Bupa for offshore debt payments. Bupa shifted over half a billion in profit to its UK parent company in 2016.
“Bupa continues to insist, despite additional investigations into the company’s tax affairs by the European Commission and the Spanish government, that it does not use any tax avoidance or aggressive tax minimisation strategies.”
ANMF Federal Secretary Annie Butler welcomed Mr Ward’s appearance at the Senate Inquiry, saying his evidence will demonstrate the need for legislation that enforces greater transparency, accountability and financial reporting by Australia’s largest for-profit aged care providers.
“Elderly nursing home residents continue to suffer, even though the top six for-profit providers are reaping in over $2 billion in taxpayer-funded subsidies,” Ms Butler said.
“The report shows that providers clearly have the financial capacity to improve staffing levels, but instead are focused on maximising their profits.
“We’re confident that the evidence provided to the inquiry will justify the need for the introduction of legislation whereby aged care providers receiving billions in government subsidies must show the funding is directly being used on care for their elderly residents.
“That must be a pre-requisite for any taxpayer subsidy, otherwise providers will continue to put profits before people.”