It was announced over the weekend that the Government plans to carry out a Royal Commission into the aged care sector.
The share prices of Japara Healthcare Ltd (ASX: JHC), Estia Health Ltd (ASX: EHE) and Regis Healthcare Ltd (ASX: REG) are all down more than 14% in response to the news.
Why Is It Happening?
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The Royal Commission into the financial sector has created major waves through the banking sector and the wider financial advice industry. Today saw the departure of National Australia Bank Ltd’s (ASX: NAB) head of consumer banking, Andrew Hagger
.
The new Prime Minister Scott Morrison said:
“As a result of the work that the government has been doing, the unannounced visits, the compliance audits, it has revealed a very disturbing trend in what is happening in terms of non-compliance and abuses and failures of care that have been occurring across the sector.”
According to Government figures, there was a 177% increase in the number of aged care homes identified as posing a serious risk to residents.
Investors appear to be expecting the inquiry to be a negative to large and small aged care operators alike.
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