Aged Care is Infrastructure: A Roadmap to Transforming Funding and Providing Choice, Certainty & Flexibility for ALL Families.
Wednesday 12 October 2022
3:00pm – 3:30pm
As a veteran in global financial markets, Craig has over 30 years’ experience in various positions including Global Chief Investment Officer for Macquarie Bank. More recently, he has worked on building a portfolio of FinTech, HealthTech and ConsumerTech start-ups. The intent behind the move to early-stage technology was to back strong management teams using market knowledge built from financial markets. Two of these companies have already moved to ASX listing with 10 – 15 times increase in value.
Forty years ago, public infrastructure in Australia including roads, airports, energy and telecommunications were underfunded, following years of downward pressure on government spending. While the specific models vary, what eventually unlocked the infrastructure funding impasse was the transformation of infrastructure’s funding. Initially, funding was provided by central and state governments, with operational management also controlled by government.
Inevitably, government operated and financed assets will underperform. The private sector stepped in as operators, but the government was still required for the massive capital expenditure involved.
The funding crisis for infrastructure was finally unlocked by a standardised investment model, driven from partnerships between the sector and finance companies – not from government.
This history mimicks the story of aged care for one simple reason: aged care is infrastructure that has not yet been transformed into investable infrastructure. The result is an unsustainable funding model with operators, bank loans and unpredictable short-term RADs providing almost all funding. If the industry is to transform to meet the changing expectations of consumers, and at the same time expand supply to meet the rapidly growing demand over the next decade, aged care must transform itself into investable infrastructure.
The good news is that this transformation is largely in our control; it does not require government policy change. Furthermore, the economic and investment market environment lends itself strongly to supporting aged care, if it can make this transformation.
In my session, I will cover the roadmap for transforming aged care into investable infrastructure, exploring the following points:
- What features transform infrastructure into investable infrastructure?
- What innovative financing solutions can be implemented within the current policy framework to make aged care more investable?
- How can the existing RAD funding model be transformed from short-term and unpredictable to more infrastructure-like, ie predictable?
- Can a resident’s property and other assets play a role in this transformation?
- What impact could policy changes such as the recent ACFI to AN-ACC shift or the mooted RAD changes, have on our ability to transform?
- Could transformation to an investable asset class create better returns on surplus capital for operators themselves?
- How will this transformation impact social equality in accessing quality aged care?
How to transform aged care into investable infrastructure and radicalise funding to provide choice, flexibility and certainty.