I have today asked the Productivity Commission to report within six months on subsidies to providers of residential aged care. The inquiry will examine the differing subsidy rates across Australia and review the proposed ‘coalescence’ of those rates to a uniform national rate over a seven year period. The terms of reference are attached.

I have asked the Commission to examine the relative costs across Australia of providing nursing home care, the trends in wage costs and the extent to which subsidies should vary by State and Territory. If appropriate, the Commission is to recommend possible methodologies for maintaining differential subsidies.

The Commission will shortly release an issues paper and invite expressions of interest from parties wanting to participate in the inquiry. I encourage all interested parties to make submissions to the Commission and to attend public hearings.

CANBERRA

13 July 1998

For further information contact Ian Gibbs, Assistant Commissioner (Productivity Commission, Canberra) on (02) 6240 3316.