14 September 2020
To our Residents and Staff
This week and part of next week, the Royal Commission into Aged Care Quality and Safety is conducting formal hearings into aged care funding, financing and prudential regulations. This letter addresses three significant matters likely to be raised by the Royal Commission.
As part of its hearings, the Royal Commission will examine the financial stability of residential aged care operators. Based on the Australian Government’s Aged Care Financing Authority 2020 report and other long-term industry surveys, a significant number of aged care operators are in financial distress.
Whilst we recognise this is a challenging industry, we want to assure you TriCare is a financially secure company. For the past 50 years, we have operated in a fiscally conservative manner and presently have no bank debt. We have the capacity to repay refundable accommodations deposits as they fall due.
We note that for financially distressed operators, the Australian Government acts as the guarantor for refunds of all refundable accommodation deposits.
Reinvestment in Aged Care
Our redevelopment programme has always been focused on quality, not the quantity of residential beds. Over the past decade, we have been gradually improving our older homes by upgrading and adding extensions.
We acknowledge that there is still a lot more to do, and we approach this task in a sensible and measured way. We remain committed to improving the aged care homes that our residents and future residents will occupy.
Over the past five years, we have invested approximately $110 million constructing new and upgrading older residences.
There have been recent public statements regarding TriCare’s tax compliance. We wish to reiterate that all surpluses from TriCare’s business, including residential aged care, are fully taxed in Australia.
No royalty payments, management fees or similar charges flow to any taxation jurisdiction outside Australia. Public statements to the contrary are false.
The Australian Taxation Office has audited TriCare three times over the past decade without adverse findings.
We would like to take this opportunity to thank our Residents and Staff for your continued support of TriCare, particularly during this COVID-19 period.