Australasia is home to two of the world's most developed healthcare systems and two rapidly ageing populations.

Australia and New Zealand enjoy comparable life expectancies, high standards of living and universal public healthcare. Yet when it comes to aged care, the two countries have adopted noticeably different approaches.

Both face the same fundamental challenge: how to provide dignified, affordable care for a generation that is living longer than ever before.

As Baby Boomers enter their late seventies and eighties over the coming decades, the question becomes increasingly relevant.

If you had the choice, where would you rather spend your final years?

Two countries facing the same demographic wave

Australia has around 27 million people.

New Zealand has just over five million.

Despite the difference in size, both countries are ageing rapidly.

Falling birth rates, improved healthcare and longer life expectancy mean the proportion of older citizens continues to increase.

That places enormous pressure on:

• healthcare systems;
• government budgets;
• housing;
• the aged care workforce; and
• families who increasingly provide informal care.

Neither country can simply build enough nursing homes to solve the problem.

Australia's model

Australia operates one of the world's largest residential aged care systems.

Most facilities are operated by:

• private companies;
• not-for-profit organisations; or
• religious and community groups.

Only a relatively small number are government operated.

Funding comes primarily from the Commonwealth Government, supplemented by resident contributions based on financial circumstances.

Those contributions may include accommodation payments, daily living fees and, for some residents, means-tested care fees.

One distinctive feature is the Refundable Accommodation Deposit (RAD).

Many residents who can afford it pay a substantial lump sum for their accommodation.

The money is refunded to their estate after they leave the facility or pass away, less any agreed deductions.

Supporters argue the system provides capital that allows providers to build modern facilities.

Critics question whether requiring older Australians to commit hundreds of thousands of dollars late in life is the fairest way to finance aged care.

New Zealand's approach

New Zealand takes a somewhat different path.

Residential aged care is also largely provided by private and charitable organisations, but the funding model places greater emphasis on public support once a person's assets fall below government thresholds.

People undergo both income and asset assessments.

If they qualify, the government pays for much of their residential care.

Unlike Australia, New Zealand does not rely on a widespread refundable accommodation deposit model for funding new facilities.

Instead, providers are generally paid through contracts with Te Whatu Ora (Health New Zealand), alongside resident contributions where appropriate.

The result is a system that many New Zealanders find easier to understand, although providers often argue funding levels have struggled to keep pace with rising costs.

Have scandals led to reform?

Neither country has been immune from criticism.

Australia's Royal Commission into Aged Care Quality and Safety exposed neglect, inadequate nutrition, poor staffing and failures in clinical care.

The response has been extensive.

Australia has introduced:

• mandatory care minutes;
• stronger regulation;
• increased funding;
• 24-hour registered nurse requirements in residential facilities; and
• strengthened rights for residents.

New Zealand has also reviewed standards and strengthened oversight, although it has not experienced a single inquiry on the scale of Australia's Royal Commission.

Both governments now place much greater emphasis on quality of care, transparency and accountability.

Staffing remains the greatest challenge

Buildings can be constructed.

Technology can improve.

Funding can increase.

Finding enough qualified staff is considerably harder.

Both countries compete for:

• registered nurses;
• enrolled nurses;
• healthcare assistants;
• allied health professionals; and
• general practitioners willing to visit residential facilities.

Workforce shortages are likely to remain one of the defining issues of aged care throughout the next two decades.

Staying at home

Perhaps the biggest similarity is that neither government wants older people entering residential care too early.

Australia has expanded home care services and support packages.

New Zealand has similarly invested in helping older people remain independent for as long as possible through community services and home support.

Most surveys show this is exactly what older people want.

For many, the ideal aged care facility is their own home.

Technology, home modifications, telehealth and community nursing increasingly make that possible.

Who pays?

The economics become increasingly difficult every year.

Governments face rising healthcare costs.

Families worry about accommodation payments.

Providers struggle with higher wages, insurance, utilities and compliance costs.

At the same time, taxpayers rightly expect older Australians and New Zealanders to receive safe, dignified care.

The numbers simply become larger every year.

Wealth and choice

One question increasingly being debated on both sides of the Tasman is whether wealth influences choice.

In Australia, people with greater financial resources often have more accommodation options available because they can more readily meet accommodation payment requirements.

In New Zealand, access is more closely linked to clinical need and financial assessment, although availability still varies depending on region.

Neither country can claim perfect equality of access.

Demand often exceeds supply in desirable locations.

Waiting lists remain common.

The Baby Boomer generation changes everything

The generation now approaching advanced old age is unlike any before it.

Many Baby Boomers own valuable homes.

Some have substantial superannuation.

Others have relatively little beyond the Age Pension.

Many wish to remain independent for as long as possible.

Others may eventually require complex dementia care or high-level nursing support.

Designing one funding system that fairly accommodates such diverse financial circumstances is becoming increasingly difficult.

Which country has the better system?

The answer depends on what people value most.

Australia generally offers a broader range of facilities and significant private investment, but asks many residents with assets to contribute more directly towards accommodation.

New Zealand's model is often viewed as simpler and more publicly funded, but providers have long argued that funding constraints limit investment and expansion.

Neither country has solved the central challenge.

How do societies provide increasingly sophisticated care for rapidly growing numbers of older citizens without imposing unsustainable costs on taxpayers or families?

There may be no perfect answer.

The Australasian View

Australia and New Zealand have much to learn from each other.

Australia's stronger capital investment has produced many modern facilities and recent reforms have significantly improved staffing and oversight. New Zealand demonstrates that a funding model with fewer upfront accommodation costs can be easier for families to understand, although it too faces financial pressures.

Perhaps the greatest lesson is that aged care is no longer simply a health issue. It is an economic issue, a housing issue, a workforce issue and, above all, a measure of how two prosperous societies choose to care for the generations that built them.

As both countries age, the real competition should not be over which nation has the better system today, but which is willing to build the better system for tomorrow.