Three out of four nursing homes admit that they cannot provide residents the quality of care and services required by law, based on the current public funding levels.
Most regard the current funding system to be financially unviable from the survey conducted on 900 nursing homes.
Three-quarters reported that taxpayer subsidies and supplements were not sufficient to provide services outlined in the federal government's Quality of Care Principles -- legislation that sets the standards for accommodation, care, meals and hygiene.
84 per cent believed that accommodation charges were too low to provide enough capital to build new centres or maintain old facilities.
Nursing homes receive $35 to $106 a day in taxpayer subsidies for each aged resident, and can also charge residents 84 per cent of their pension payment -- about $35 a day.
It was reported that in the next financial year, the federal government will spend $6.2 billion on residential aged-care subsidies. However, Aged Care Association Australia, which commissioned the new survey by Hynes Lawyers, wants the government to introduce accommodation bonds for nursing home residents.
The bonds, raised by selling the resident's home, would be kept in trust and invested in capital infrastructure to build and maintain nursing homes.
Previously, the Howard government tried to introduce accommodation bonds but abandoned the idea after a public outcry. The unpopular policy will be sure to be seen in the Productivity Commission's review of the aged this year.
ACAA chief executive Rod Young said yesterday aged-care providers needed a new system of funding to build new facilities.
But the Minister for Ageing, Justine Elliot, yesterday warned there were no excuses for providing poor quality care to our older Australians. She further adds that government will investigate allegations that this is not being provided.
Ms Elliot said the government had boosted funding for aged and community care by nearly 30 per cent to an average of $45,000 for each resident in care.