A government pledge of close to half a billion dollars to launch an overhaul of the aged care sector has failed to rally the share prices of ASX-listed operators, with analysts warning future funding remains murky after the royal commission revelations.
Shares in Japara Healthcare, Estia Health and Regis Health Care all slid last week after the aged care royal commission’s final 2000 page report was released. The three companies opened lower on Monday before recovering slightly as the broader ASX rallied.
Prime Minister Scott Morrison at a press conference about Royal Commission into Aged care quality and safety, Final report: Care, Dignity and Respect, at Kirribilli House.Credit:Edwina Pickles
Shares in Japara are down 75 per cent over the past five years, while Regis and Estia have both dropped more than 60 per cent since 2016.
The listed providers had told investors at their half-year results in February they were eagerly awaiting the final report of the royal commission into aged care and the government’s response to it, hoping its contents would help overhaul funding and focus on the viability of the sector.
The 148 recommendations include sweeping reforms including a new aged care act, the introduction of a star rating system for facilities and a possible aged care levy for the funding of the system. The government has made an initial pledge of $452 million in additional funding.
Estia said it was combing through the full report before issuing a further response. “The commission has been a thorough and valuable process and we believe, as a result, the entire sector will be better positioned to provide a sustainable aged care system that meets the needs of older Australians in the future,” chief executive Ian Thorley said.
Regis Health Care chief executive Linda Mellors said she was ready to lead the company through “major sector reform”.
“We will continue to work with consumers, government and stakeholders on the further reforms needed to deliver consistently high quality and safe care to all older people,” she said.
A Regis spokeswoman said the company agrees with some of the recommendations such as a star rating system for providers, but is waiting for further response from government on the question of funding.
