(Bloomberg) -- Shares of Australian aged-care providers plunged after Prime Minister Scott Morrison said the government will establish an inquiry to investigate the industry's quality of services.
Stocks in three leading providers lost as much as A$445 million ($318 million) in market value on Monday after Morrison said the inquiry will examine levels of care in residential facilities to elderly Australians and younger people with disabilities.
Japara Healthcare Ltd. slumped as much as 21 percent, while Estia Health Ltd. tumbled 17 percent and Regis Healthcare Ltd. lost 20 percent.
Morrison, who's been in office less than a month, said Sunday the government had uncovered “a very disturbing trend” of malpractice in the industry, including abuses and failures of care. The government has shut down almost one aged-care service a month in the past year after increasing checks, he said.
The sector provides services to over 1.3 million people. Annual government spending on aged care is expected to jump to A$23.6 billion by 2023 from a record A$18.6 billion this year.
To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net
To contact the editor responsible for this story: Edward Johnson at ejohnson28@bloomberg.net
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