SYDNEY (Reuters) – Shares of Australia’s biggest listed aged care providers fell on Friday after a government-backed inquiry strongly criticized care of the elderly and vulnerable, raising expectations of a far-reaching regulatory overhaul.
The Royal Commission inquiry released a report after the market close on Thursday, detailing the findings of an almost year-long investigation of Australia’s A$ 20 billion ($ 14 billion) aged-care industry.
The report called for a fundamental overhaul of the design, objectives, regulation and funding of aged care in Australia.
“The neglect that we have found in this Royal Commission, to date, is far from the best that can be done,” commissioners Richard Tracey and Lynelle Briggs said in the report. “Rather, it is a sad and shocking system that diminishes Australia as a nation.”
A previous Royal Commission into misconduct in Australia’s financial sector has had wide-ranging repercussions, including structural changes to wealth management businesses and lawsuits brought against institutions and individuals by regulators.
Shares in Regis Healthcare Ltd, the second-largest aged are operator by market value, fell as much as 6% in early trading on Friday, while shares of rival Japara Healthcare Ltd were down 2%, outpacing a broader market decline of 0.4%.
Shares of the largest aged care operator, Aveo Group, were flat, while shares of another operator, Estia Health Ltd, were down 0.7%.
All four stocks were seen until the inquiry as attractive because of their exposure to Australia’s ageing population, but have been sliding since the probe was announced in September 2018.
Australia’s top authority on older Australians, the Council on the Ageing (COTA) Australia, welcomed the Royal Commission’s findings and urged more government investment.
“COTA Australia.. welcomes the Royal Commission’s recognition that older Australians are neglected not only within the aged care system which supports around 1.3 million older Australians each year, but also in the negative attitudes towards older people within the broader community.”
A final report will be handed to the governor-general on Nov. 12, 2020.
Reporting by Byron Kaye and Melanie Burton; editing by Jane Wardell