Why Australia’s Aged Care System Will Fail by 2040 (And How to Fix It) | Simon Kuestenmacher

Summary

Demographer Simon Kuestenmacher argues that Australia’s aged-care system is on course to fall short of demand unless the country changes how care is funded and delivered. He says Australia has about 600,000 people aged 85 and over, and that number is expected to double within 14 years. Since older people cannot be “imported” to meet demand, he sees the pressure as predictable and largely unavoidable. He estimates that roughly 54% of people who reach 85 will need daily care, while the current system is not equipped to expand sufficiently.

Kuestenmacher says the ageing population will also bring a sharp rise in dementia-related needs. Drawing on census health data, he describes a projection in which dementia numbers grow much faster than the overall population—about 74% over a decade, compared with 13% population growth. That would require more specialised and flexible facilities, including ways to support couples when only one partner develops dementia. He argues that simply scaling up today’s model will not be enough.

Obstacles to reform

• Workforce shortages: Baby boomers are leaving the workforce, while aged care needs more staff. Kuestenmacher argues that Australia’s migration settings do not sufficiently direct workers to specific occupations, employers or regions. He supports more employer-sponsored visas, with strong safeguards against exploitation, and a more strategic approach to international students that links study opportunities to expected workforce needs.
• Rigid regulation and risk aversion: The speakers describe rules and compliance requirements that can prevent providers from trying new models, even when existing outcomes are poor. Kuestenmacher criticises a “cover your own ass” culture in government and calls for monitored pilot projects, with successful approaches expanded and unsuccessful ones discontinued.
• Underused data: More information is being collected, but the speakers say it is not consistently used to guide decisions. Kuestenmacher urges providers and governments to become genuinely data-driven and to test prevention and care approaches against measurable outcomes.
• Limited gains from automation: He sees AI and robotics as ways to reduce paperwork and routine tasks—for example, enabling staff to record notes by voice in their own language and have them translated and entered into required systems. He views these tools as productivity aids, not substitutes for the human workforce needed in care.
• Funding pressures: The speakers point to financial strain among providers and the difficulty of financing better care at greater scale. Kuestenmacher says the debate must confront hard choices about government funding, taxes, means testing and how to make care affordable for people on lower incomes, rather than relying on vague promises.

Recommendations for care and independence

Kuestenmacher recommends prevention and measures that help people remain independent for longer, including exercise, healthier habits, walkable environments and relatively simple safety technology. He also argues for expanding home-based and outpatient care, alongside less institutional, more personalised residential options.

Future facilities, he suggests, should give residents greater choice over daily routines and care, and should integrate different levels of support, including dementia care.

Ageing, retirement and regional communities

The conversation considers the experience of ageing and retirement. Kuestenmacher cautions against treating everyone over 65 as a single group: people may enjoy an early-retirement “honeymoon” but later struggle with loss of routine, identity or friendships. He recommends building purpose and social connections through activities such as volunteering, hobbies, mentoring and staying in touch with friends.

He also highlights regional Australia’s particular vulnerability. As services and jobs concentrate in larger centres, smaller towns can lose population and amenities, while nearby regional hubs absorb older residents and demand for care. He argues that local employment and service access matter to the viability of these communities, but that isolated job-creation initiatives will not, by themselves, solve the national aged-care challenge.

Presenters and contributors

• Simon Kuestenmacher — guest demographer.
• Rose — podcast host/co-host; surname not stated in the subtitles.
• Another podcast co-host/presenter — name not stated in the subtitles.