A review of aged residential care facilities has found an urgent need to begin planning for up to 20,000 more people within 16 years - but says there is little financial incentive to meet this demand.
The report by district health boards, the Aged Care Association and the Ministry of Health is described as the most comprehensive review of aged care conducted in New Zealand.
It says the number of people over age 65 will rise by 84% by 2026, requiring an extra 12,000 to 20,000 places in resthomes, hospital and dementia units. Half of all facilities are more than 20 years old and a big investment will be needed to upgrade and expand the stock, it says.
But the review says operating profits are too low to stimulate the required investment.
Resthome provider Radius, which has 21 aged residential care facilities, says the report shows wages in the sector are too low.
Radius owner Brien Cree says the report is comprehensive and a good basis for decisions that will need to be made.
Health Minister Tony Ryall says subsidies to aged residential care operators will have to be examined in the wake of the report.
Mr Ryall says the previous two Budgets have boosted investment in the sector by $136 million over five years.