Total government expenditure on aged care services

IBISWorld forecasts government expenditure in aged care services to rise by 2.8% in 2023-24, to reach $1.47 billion. The population aged 70 and over is expected to expand during the year, lifting the number of people eligible to receive financial assistance from the government. However, support packages introduced during the COVID-19 pandemic, some of which were directed towards aged care providers are expected to end over the year, constraining growth in total government spending on aged care services in 2023-24.

Aged care in New Zealand has traditionally been provided by the District Health Boards (DHB), which received funding from the government under the Residential Care and Disability Support Services Act 2018. However, the regional DHB systems were replaced by a national health system governed by Health New Zealand and the Maori Health Authority in June 2022. Over the past five years, the population aged 70 and older has increased in both numbers and as a proportion of the national population. People in this age group are typically more susceptible to ailments and injury, generally requiring more frequent and complex healthcare assistance than their younger cohorts. As people age, greater assistance with day-to-day activities is also often required. As a result, government expenditure on services dedicated to the elderly is significant. The expansion of this demographic has contributed to greater demand for government spending on aged care services. The growing cost of health care, along with rising co-morbidity rates among the elderly, has driven higher public spending on aged care over the past five years.

The Healthy Ageing Strategy (HES) was launched in December 2016. The HES outlines the strategic direction for the health and well-being of older New Zealanders over the ten years through 2026-27. The HES adopts a life-course approach, which begins with a focus on the prevention and early detection of conditions, progressing to the management of advanced chronic conditions over time. The roll-out of the HES has boosted growth in government spending on services for the elderly over the past years. Overall, IBISWorld forecasts total government expenditure on aged care services to rise at a compound annual rate of 4.1% over the five years through 2023-24.