A new report examining the tax and financial practices of Australia’s six largest family-owned aged care companies provides growing evidence of the lack of transparency and accountability regarding public funding towards the aged sector, says the Australian Nursing and Midwifery Federation (ANMF).
The report, All in the Family: Tax and Financial Practices of Australia’s largest Family-Owned Aged Care Companies, was undertaken by the Tax Justice Network Australia and led by Jason Ward, Principal Analyst for global corporate tax research hub the Centre for International Corporate Tax Accountability & Research (CICTAR).
According to the report, Australia’s six largest family-owned aged care companies received over $711 million in annual federal funding ($60,000 per year per resident) to operate 130 facilities, with almost 12,000 beds.
The report found several of the aged care companies, owned by some of Australia’s richest families, use ‘complex corporate structures’, intertwined with trusts that appear specifically designed to avoid tax.
It states there is no doubt these families have made “considerable profits” from a publicly-funded industry and that before any increase in funding measures must be put in place to ensure money is directly spent on improving staffing levels and the quality of care.
“These family-owned aged care companies highlight the lack of transparency and accountability on public funding in the aged care sector and provide clear examples of why simple reforms are needed to restore public integrity in both aged care and the broader tax system,” the report states.
Key recommendations from the report include:
- All entities receiving over $10 million in annual federal funding, must file full and complete financial statements with ASIC
- Immediately forming a public register of beneficial ownership, including trusts
- A minimum tax of 30% on distributions from discretionary trusts and an examination of further trust reforms to bring Australia in line with global standards
ANMF Federal Secretary Annie Butler said the report raises serious questions about the tax practices of some of Australia’s family-owned aged care companies and how taxpayer funds are being used.
“It again shows why aged care providers must be made accountable for the millions of dollars they receive in government subsidies, particularly those such as the companies highlighted in this report, making significant profits,” Ms Butler said.
“The fundamental question is whether care is being compromised for the sake of increasing profits. The stories being told currently to the Royal Commission and the stories we have heard from thousands of aged care workers suggest that it is. But without any accountability for the use of taxpayers’ money in aged care it’s almost impossible to tell.”
View the full report