Aged care operators went to their annual conference wanting a price. They got a process. National’s health spokesperson Simeon Brown pledged a new steering group for aged care reform if re-elected, saying National agreed with the broad direction of the Ministerial Advisory Group’s August report. The trouble is that the report already contains the answer the sector needs. Specific funding uplifts have been modelled, phased and justified. What is missing is anyone willing to commit to them.
The homework has been handed in
The advisory group, chaired by former Health Minister David Cunliffe when it was appointed in December 2025, delivered its report, A place to grow old, in August. It recommends a 6% above-inflation uplift for in-home care and a 7.1% uplift for residential care in 2027/28, followed by a 13.8% uplift for new-built rooms in 2028/29. It also proposes an independent Aged Care Pricing Authority to set prices from actual provider cost data.
That 13.8% figure exists for one explicit reason, to make construction of new capacity at scale commercially investable. That is the whole game. Without it, no board signs off on a new care facility.
The system is already running hot
The report’s own figures make the case. Government spent $2.5 billion on in-home and residential aged care in 2024/25, with residents contributing a further $1.26 billion. Occupancy has climbed from 87% to above 92% in five years, and demand is projected to rise by 16,100 bed years, or 45%, by 2037/38.
The most telling number is the quiet one. Beds without premium charges have fallen from 70% in 2010 to 47% today. Providers have been plugging a broken base price with extra charges on residents for more than a decade. And the cost of doing nothing is not zero: a 9,000-bed shortfall would cost government nearly $600 million more a year, largely through older people stuck in hospital beds. Read that way, the uplifts are cost avoidance, not largesse.
What National actually offered
Brown said much of the right stuff. He acknowledged that funding is “what keeps many of you up at night”, argued funding should follow care need and complexity, floated hospital entry and exit payments, and backed delegated models letting providers run more of their own assessments. He named funding reform, transparent pricing and capacity planning as priorities.
What he did not do is commit to the 6%, 7.1% or 13.8%, or to a timeline. “Working with the industry” on implementation is a materially weaker promise than funding prices that have already been worked out. Conference attendees noticed, with one complaining reform keeps being kicked down the road by successive governments.
Capital wants a signature, not a forum
The market has priced the gap precisely. Forsyth Barr analysts described the sector as at “a critical juncture” in September, with Radius Residential Care and Oceania Healthcare the biggest percentage winners if the uplifts land, but warned “ultimate policy settings remain highly uncertain”.
Law firm Anthony Harper was blunter, noting the figures are modelled outputs that should not be relied upon for investment decisions until government commits to implementation. It also flagged a design risk worth fixing in any steering group: the 13.8% uplift carries a requirement that 50% of new rooms be standard beds, which could favour large incumbents with room to expand over new entrants and smaller rural facilities. That is exactly where attendees said the funding and staffing gaps bite hardest.
A year of process already
This cycle began in October 2025, when Brown, then Health Minister, announced the advisory group with funding changes pencilled in from 2027. At the time, Aged Care Association chief executive Tracey Martin urged an interim Budget bid because the group’s timeline would miss Budget 2026. She told RNZ in 2025 that “somebody’s going to have to pony up with money”. A year on, nobody has.
Martin was gracious about Brown’s speech this week, wants the association on any steering group, and says she will work with any party. That is the right posture. But the test for every party before 7 November is the same, and it is not complicated.
What a bankable pledge looks like
A credible aged care policy names the uplifts, books them in Budget 2027 and legislates the pricing authority. Anything less leaves operators doing what they have done since 2010, building premium rooms for those who can pay and rationing standard beds for those who cannot. Brown has the direction right and deserves credit for embracing the report rather than shelving it. Now he, and his rivals, need to put a number on it. Banks lend against prices, not steering groups.
Sources
- RNZ: National pledges aged care reform steering group if re-elected (2026-10-29)
- Beehive: Aged Care Advisory Group appointed (2025-12-17)
- Ministry of Health: A place to grow old, Securing the future of aged care (report) (2026-08)
- NZ Herald: Aged care report recommends 13.8% uplift in Government payments for new rooms (2026-08-17)
- Ministry of Health: A place to grow old, Summary (2026-08)
- NZ Herald Stock Takes: Radius Residential Care and Oceania Healthcare set to gain the most from proposed aged care shake-up (2026-09-10)
- Anthony Harper: The future of aged care, what the Advisory Group’s report means for residential care providers (2026-09-16)
- Beehive: Building fit-for-purpose Aged Care (2025-10-28)
- Scoop: Aged Care Association Welcomes Cross-Party Commitment To Aged Care Reform (2025-10-28)
- RNZ The Detail: In the face of a rapidly aging population, aged care sector prepares for a tsunami of need (2025-10-30)
Join the discussion
Add useful context, ask a good question, or challenge an idea — keep it specific and respectful.