In Australia, 96,709 people were waiting for a Home Care Package at their approved level as of 30 June 2025. Funding for Home Care Packages increased by 15% in FY25, but the number of people receiving home support advanced by 6.3% in FY25 according to KPMG. Funding and allocations increased, but were insufficient to cover the number of approved people.

The Essentials

  • The market counted 873 providers at the end of FY25 and KPMG notes that demand exceeds supply.
  • According to KPMG, 96,709 people were waiting for a package at their approved level as of 30 June 2025, while Home Care Package funding increased by 15% in FY25 and the number of supported people by 6.3%.
  • Access to funding is prioritized according to needs established during assessment, subject to availability of places, but services are increasingly concentrated in metropolitan areas, while rural and remote areas face specific supply and workforce difficulties.
  • The sharp projected increase in those aged 80 and over should increase pressure on home care demand.
  • Australia is a full-scale test for all OECD countries betting on the market to organize their home care.

96,709 People Waiting, and Budgets Are Still Rising

The figure intrigues. Between June 2024 and June 2025, the Home Care Package waiting list grew from 68,586 to 96,709 people. Since reforms in the 2010s, Australia has built a home care system based on consumer choice: older people deemed eligible and assigned a package can choose a provider from the 873 home care providers recorded at the end of FY25. In theory, competition was supposed to reduce waiting times, improve quality, and distribute supply where demand exists. In practice, according to the KPMG Aged Care Report 2026, the result is a waiting list of nearly 97,000 people and a nine-point gap between budget growth and actual access growth.

This gap—15% additional budget for 6.3% more access—reflects that 873 separate entities each manage their own accounting, marketing, and regulatory compliance. Each provider must become known, retain customers, issue invoices, and differentiate themselves. Management fees represent a portion of provider revenues, but the source does not demonstrate that they occur primarily at the expense of care.

It is a problem of allocative efficiency, but also of equity. Among the 873 providers, not all cover the same areas. Rural and disadvantaged suburban areas have few competing operators; supply is scarce, waiting times long, services less specialized. Wealthy metropolises, Sydney or Melbourne, concentrate providers: people who know how to navigate a fragmented market, who have internet access, who have a family caregiver able to compare offerings, find services faster. Others wait.

The Architecture Produces What Insufficient Regulation Always Produces

Joseph Stiglitz, whose work on information asymmetries and unregulated market capture has been influential for decades, articulated this dynamic clearly in his recent publications on care markets: when the regulator allows the market to allocate a good whose demand is captive (dependent older adults, with no realistic alternative), providers optimize their clientele rather than their coverage. They concentrate where demand is solvent, fluid, inexpensive to serve. Complex cases, isolated areas, patients without active caregivers remain on the margins.

The Australian home care market illustrates this mechanism exactly. The freedom of choice granted to patients only makes sense if supply is present and comparable. When 873 providers coexist without obligation of territorial coverage, without a unified minimum service threshold. Government reports on waiting times are published, even if they don’t necessarily provide all waiting times at each provider level—freedom of choice becomes a formal freedom. It benefits those who have the resources, cultural, social, and economic, to use it.

A classical liberal reading, one that economists like Philippe Aghion or Tyler Cowen would defend regarding service markets, would concede that fragmentation is not itself the problem: it is the absence of mechanisms for information and effective competitive pressure. On a well-informed market, underperforming providers lose customers; efficient providers extend their share. But this reasoning assumes mobile, informed demand, capable of imposing sanctions. An 82-year-old dependent person who has been waiting for eighteen months doesn’t change providers the way they would change electricity suppliers. Competitive pressure doesn’t operate in this market segment as it does in others.

Australia made an institutional bet: substitute competition for planning. After ten years, the data invites examination of the conditions for its validity, not wholesale rejection.

Corrections Aimed at by Recent Reforms

The Australian government has not remained inert in the face of waiting lists. Support at Home was launched on 1 November 2025 to replace initially Home Care Packages and the Short-Term Restorative Care Programme, aiming to simplify access by reducing allocation delays. The Australian Treasury accompanied this reform with an analysis of administrative bottlenecks: part of the delays results from request processing time, not solely from provider scarcity.

This is an important signal. The government recognizes that the system’s internal bureaucracy is as determining a variable as supply volume. Simplifying allocation circuits, reducing forms, accelerating needs assessments: these operational reforms can gain months on delays that sometimes stretched over a year.

But these adjustments don’t address territorial fragmentation. A system faster in allocation delays remains unequal if supply remains concentrated in wealthy urban areas. The question of geographic coverage, which falls under regulatory obligation rather than market incentive, remains entirely open. As studies of primary care access disparities documented at the European scale show, five years of life expectancy can separate populations based solely on their geography, even in well-funded systems.

Australia has a tool few countries have developed as finely: its regional demographic databases, produced by ID Australia Demographics, allow modeling of demand at a precise local level. These data exist; the question is whether regulators use them to impose coverage obligations on providers, or whether they remain observational tools without regulatory consequence.

Public Funding Facing Demand from Disappearing Caregivers

Demographic pressure on home care also affects informal caregivers, spouses, children, and neighbors, who absorb a considerable portion of unpaid care work not counted in public budgets. Their availability is declining with labor market shifts, geographic mobility of families, and aging of caregivers themselves. The ratio of caregivers for those aged 80 and over will be halved by 2050 in Europe, and Australian dynamics follow a comparable trajectory.

The need for formal care, that provided by the 873 providers, should grow significantly due to erosion of informal support resources. Each informal caregiver who ceases to provide part of care generates additional demand on the formal system. Estimating future demand requires integrating erosion of family resources that previously complemented public supply, not merely counting those aged 80 and over.

The home care sector is also an employment sector. It recruits massively low-skilled workers, often women, often immigrants, under conditions of remuneration and stability that struggle to retain them. Turnover is high; service quality suffers; providers struggle to recruit in rural areas, which closes the circle of territorial inequality. The human resources challenge is as structuring as the financing challenge, and far less visible in budgetary debates.

The 80+ Wave Will Test the Model Before Its Reforms Bear Fruit

Demographic projections published by ID Australia Demographics predict significant increase in the cohort aged 80 and over between 2025 and 2045. This wave is predictable, quantified, and arrives in less than twenty years. The 2026 KPMG report poses implicitly the question of whether a market fragmented into hundreds of providers can absorb this doubling without permanently diverging into two distinct access circuits.

Two trajectories emerge, neither inevitable.

In the first, the market adapts under pressure: the least efficient providers are absorbed by the strongest, natural consolidation reduces the number of operators, digital intermediation platforms emerge to reduce information costs and improve matching between supply and demand. Support at Home Program, if well executed, accelerates allocations. Australia succeeds in serving more people without major institutional overhaul, at the price of persistent but contained access inequalities. This scenario assumes consolidation is regulated to prevent formation of regional oligopolies, which would replace inefficient fragmentation with uncompetitive concentration.

In the second trajectory, demand grows and profitable providers reinforce their presence in high purchasing power areas. Waiting lists lengthen, profitable providers strengthen their presence in wealthy areas, rural and disadvantaged areas see their supply stagnate or decline. Funding has risen faster than the number of people receiving support in FY25, reproducing at larger scale the gap observed today. Families able to afford it supplement insufficient public supply with private services; others absorb the burden. The system could gradually segment, with unequal supply according to geographic areas and families’ payment capacity.

The signal to watch in coming years is less the overall funding amount than the rate of rural and peri-urban coverage. If new Support at Home Program obligations include verifiable territorial service commitments, and if the regulator enforces them, the first trajectory remains accessible. If these commitments remain optional or unmonitored, the second gradually installs, without visible rupture, through accumulation of small local concessions.

Australia holds particular interest for other OECD countries precisely because it has a decade’s head start in this experiment. France, the Netherlands, the United Kingdom are building or reforming their home care systems in the same direction, more market, more choice, more providers. Australian results, including its dead ends, are empirical data these countries can use before their own demographic wave arrives. As research on the French pension system facing demographic constraints shows, aging pressure leaves little room for late reforms.

Margins for Correcting the Australian Model

The diagnosis is severe but the starting point is not unfavorable. Australia has substantial public funding, an existing infrastructure of providers, high-quality demographic data, and a government that has launched reform. These resources are real.

The determining variable is regulatory. The government can choose between two postures: accompany the market in hopes it corrects itself, or define non-negotiable floors—minimum territorial coverage, maximum guaranteed delays per zone, mandatory transparency on actual waiting times per provider and per geographic sector. The second posture limits operator freedom; it preserves the market as an allocation mechanism while preventing it from producing care deserts.

Smaller countries have shown that hybridization is possible. The Netherlands built a system where approved private providers operate within a regulatory framework imposing territorial obligations and quality standards verified annually. Competition exists, prices are regulated, coverage is monitored. This model has its flaws, but it prevents bifurcation into two circuits.

The demographic wave has not yet reached full power, and ongoing reforms can be strengthened. The list of 96,709 people on 30 June 2025 signaled strong demand pressure, without alone permitting prediction of system capacity in five or ten years.

Sources

  1. KPMG Aged Care Market Analysis Report 2026, KPMG Australia
  2. Joseph Stiglitz, works on inequalities and care markets, Project Syndicate
  3. Australia Treasury, budgetary analysis of Support at Home Program 2024 (Australian Treasury)
  4. ID Australia Demographics, regional demographic projections 2026-2045