There are hundreds of areas where Kiwis suspect they outshine their Australian counterparts but one least likely to come to mind is aged care.
Yet that's what the New Zealand Aged Care Association reports, as an increasing number of Australian retirement firms ask the industry body to arrange tours of Kiwi retirement villages.
The draw, said association chief executive Martin Taylor, was New Zealand's mixed-care model, which incorporates residential and hospital facilities on the same property. The model is used by listed retirement firms Ryman Healthcare, Summerset and Metlifecare, among others, and delivers medical support to retirees in their homes. As well, the villages can sell premium services, a profitable revenue stream. That contrasts with Australia where a more prescriptive regulatory regime restricts where retirement care facilities can be built, what services are allowed there, and who can occupy them.
Cam Ansell, national head of aged care at Grant Thornton in Australia, said Australian investors expected regulations to start easing in the next five to 10 years.
The Australian Government would realise "the next generation of consumers won't be told what they can and can't do with their money", Ansell said. The New Zealand approach was among the best in the world, which was why it was attracting international interest but it could improve further.
Under the present New Zealand model, consumers buy occupation rights to a room, bed or villa in a retirement village. Once they die or give up the rights, it is resold.
This is a highly profitable capital gain for retirement village operators, as all the development costs are typically covered by the first sale, although the fair value of the asset is decreased because of age and wear and tear. Occupation rights typically decrease in value by a set proportion every year, say 5 per cent, so a retiree leaving after 10 years would receive about half the value back.
In Australia, retirees can make a capital contribution above and beyond the occupation right.
On resale, they, or their family, receive the value of the occupation rights (if any remains), plus a capital return proportionate to how much they put in. Fairfax NZ
- © Fairfax NZ News
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