The announcement comes a year after a state-run dementia nursing home in South Australia state was shut when an investigation revealed horrific mistreatment of elderly residents over a 10-year period.
Since that scandal, the health department has closed almost one aged care service each month, while a growing number are failing to meet standards, Morrison said in a statement.
"Incidences of older people being hurt by failures of care simply cannot be explained or excused," he added.
"We must be assured about how widespread these cases are... there clearly remains areas of concern with regard to the quality and safety of aged care services."
The inquiry will probe profit and non-for-profit organisations, and also look at the care given to younger Australians with disabilities living in such facilities.
There has been a 177 per cent leap in the number of aged-care homes where a "serious risk" to residents were identified in the 2017-18 financial year, according to government data released to Sydney's Sunday Telegraph.
The figures also show a 292 per cent increase in the number of facilities that were falling significantly short of government regulations.
Demand for services is expected to surge as the "baby boomer" generation born after World War II swells the ranks of retirees.
Canberra funding for aged care is already at record levels, reaching Australian Dollar 18.6 billion ( USD 13.3 billion) in 2017-18. The government expects it to grow in the next five years by a further Australian Dollar 5 billion.
Around one in seven Australians are aged 65 and above, according to 2017 government data, with the proportion of elderly people tipped to reach 22 per cent of the population by 2057.
A damning 146-page report released in February catalogued numerous complaints of abuse and neglect at aged care facilities.
Some of the worst cases raised included a 70-year-old attacked and killed by another elderly resident, the use of restraints, overdosing of patients and the indecent assault of a 99-year-old woman by a male carer.
Earlier this month a carer in Sydney was charged after allegedly assaulting an elderly man by pulling his shirt and hitting him repeatedly with a shoe.
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