Delivering care in Australia

Why is a new approach needed?

Australia’s aged care system has been shaped by a period of significant scrutiny and reform. The Royal Commission into Aged Care Quality and Safety identified systemic failures across the sector, including a lack of transparency, limited choice and control for older people, workforce pressures and poorer outcomes in regional, rural and remote communities.

These findings helped catalyse a shift away from systems built primarily around funding mechanisms and compliance, towards care models that place people at the centre – recognising older people not just as service recipients, but as rights-holders with agency, voice and choice.

In response to the Royal Commission, the Business Council of Co-operatives and Mutuals published Action to Empower: Why Australia needs more co-operative and mutual enterprises in health, community and social services.

The report set out the potential contribution of co-operatives and mutuals to aged care and disability services, drawing on evidence that greater diversity in ownership models creates stronger opportunities for place-based approaches to care. These approaches are better able to respond to the needs of people who require care and those who provide it. The report also highlighted that co-operatives and mutuals are more likely to emerge and succeed where there are co-operative-friendly business support programs.

Compared with many other countries, Australia continues to have relatively few co-operatives and mutuals in social care. However, a growing number of successful social care co-operatives and mutuals are now emerging, providing a strong foundation for expanding the presence and impact of member-owned enterprises across the sector. These models also create meaningful opportunities for workers to be motivated and empowered through employee ownership, strengthening engagement, accountability and long-term commitment to the success of the enterprise.

A reform environment that enables new models

As part of the Australian Government’s aged care reforms, a new rights-based Aged Care Act is being introduced, marking a fundamental change in how aged care is designed, governed and delivered in Australia. The Act reflects the Royal Commission’s call for a person-centred system grounded in dignity, respect and quality care.

Alongside these reforms, the Australian Government has recognised the role that co-operatives and mutuals can play as member-owned, participatory and place-based enterprises. Through targeted policy settings and program funding, co-operative and mutual models are increasingly supported as part of a more diverse and resilient social care ecosystem.

Why Australia needs innovation in business models for service delivery

Despite reform, the sector continues to face structural challenges. Workforce shortages, financial sustainability pressures and growing demand all point to the limits of traditional ownership and delivery models.

Co-operatives and mutuals offer an alternative approach – one that aligns incentives around care quality, workforce wellbeing and long-term community benefit rather than short-term financial extraction. International and local experience shows that increasing diversity in ownership models can strengthen accountability, improve service responsiveness and support innovation in care delivery.

Key challenges facing the aged care sector

The aged care sector continues to face significant and interrelated challenges, including:

• Workforce shortages and high turnover
• Increasing demand driven by Australia’s ageing population
• Loss of trust and confidence highlighted by the Royal Commission
• Rising costs and financial pressure on providers
• Regional disadvantage and limited access to services in rural and remote areas
• Increasing compliance and regulatory complexity

These challenges place strain on providers, workers and communities, and limit the ability of existing models to deliver sustainable, high-quality care.

How co-operatives respond to these challenges

Co-operatives and mutuals provide a practical, people-centred response by:

• Empowering workers through shared ownership and participation in decision-making
• Enabling communities to design and govern services that reflect local needs
• Pooling shared services such as HR, IT, payroll and compliance to reduce costs
• Reinvesting surpluses locally rather than distributing profits to external shareholders
• Building trust through transparent, member-led governance
• Offering flexibility and responsiveness in diverse and changing care contexts

This alignment between ownership, governance and service delivery enables co-operatives and mutuals to address structural challenges while remaining grounded in care quality and community benefit.

How social care co-operatives and mutuals help

Social care co-operatives and mutuals deliver services through democratically governed, member-owned structures. Members may include care recipients, workers, community members or a combination of these groups. This shared ownership model embeds participation, accountability and reinvestment into the core of the enterprise.

These models operate across aged care, disability services, community health, First Nations services and social housing. Under the new aged care regulatory framework, specific provisions recognise the distinct governance structures of co-operatives, enabling them to meet quality and accountability requirements while remaining true to co-operative identity and principles.

Learn more

Care Together works with communities, workers and organisations to explore, establish and strengthen co-operative and mutual models of social care that align with Australia’s reformed aged care system.

To learn more about the regulatory environment for co-operatives in aged care, including governance considerations under the new Aged Care Act and Rules, access the Care Together toolkit.

You can also explore the benefits of social care co-operatives and mutuals, when these models are most appropriate and the different types of social care mutuals operating in Australia.