Australia's aged care system is failing and needs to be overhauled, according to the Grattan Institute.

Grattan health program director Stephen Duckett said the care and support of older Australians must come before the profits of private providers.

"Ageism is part of the problem, and emphasising the rights of older Australians in need of care and support is the start of the solution," Duckett said.

"The horror stories from the Royal Commission into aged care and from the COVID-19 aged care crisis have to stop."

Duckett called for an increase in spending and an overhaul in regulation to fix the sector, but said the most important factor is changing the culture of the aged care system.

"Over the past few decades the sector has become a 'market'. As for-profit providers moved in, residential facilities got bigger. Regulation has not kept pace with the increasingly privatised market. Government focus has been on constraining costs rather than ensuring quality," Duckett said.

"The government's poor commitment to the care and support of older Australians reflects society's disdainful attitude to the aged.

"Older Australians are often seen as a burden and no longer valuable or contributing members of society. They are pushed out of sight and out of mind."

Duckett said Australia's top-down, provider centric aged care system is "a shameful mess" that lacks funding and is poorly regulated.

"Merely adding further Band-Aids to a broken system is not enough. Australia needs to start again with a new Act that puts the rights of older Australians at the heart," he said.

Duckett set out five key rights based principles that should shape the system including, independence, informed and supported choice control, universal access to reasonable supports, equity and dignity, including dignity in death.

"A new system, based on the rights of older people, will look very different from the provider-centric system Australia has now. Older people would be more empowered and be assisted to make informed choices," Duckett said.

"Older Australians would be better able to participate in the community and fulfil their goals and aspirations. This would then, over time, reshape the system to better meet the desires and aspirations of older Australians."

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