Employers told: funding must go to wages

The federal Labor government has warned aged care employers not to divert Commonwealth funding intended to be used for wage increases.

The Minister for Mental Health and Ageing, Mark Butler, said only half the additional government funding paid to providers over the past four years had been used to increase wages for aged care workers.

He said government subsidies provided under the Aged Care Funding Instrument (ACFI) had increased by an average 8.4% every year since 2008, yet the total average wage bill had increased by only 4.2% per year.

“I’ve said very clearly to providers, we are not just going to provide additional funding to the system if we don’t have the confidence that that additional funding is going to wages,” Mr Butler told the NSWNMA annual conference in August.

ACFI was introduced in 2008 as a new means of allocating Australian government subsidy to residential aged care providers.

In addition to ACFI, the government will provide $1.2 billion over the next five years to help boost aged care wages, as part of a strategy to tackle critical workforce shortages.

Mr Butler said the extra funding under a Workforce Compact – part of Labor’s Living Longer Living Better aged care reform package – would start to go into workers’ pockets from July 1 next year.

Increases will be paid under a template enterprise agreement being devised by a workforce advisory group including representatives of unions and employers.

“The template agreement will be rolled out at sites that don’t have (enterprise) agreements or as a variation to those that do have agreements, over the course of summer,” Mr Butler said. “This is a bridging proposal; there is much more expensive, longer-term work that needs to be done in the aged care sector to achieve what the Productivity Commission described as fair and competitive wages.”

He said the 300,000-strong aged care workforce would increase to almost one million employees by 2050, and eventually get to the point where one in 20 employees was in aged care.

“However, we won’t get there if we don’t lift wages and don’t improve working conditions and some management practices in this critically important sector.

“I know there are some longer term ambitions that your union has, and older Australians have, around wages and staffing levels. The bridging arrangements will give us a stronger foundation to develop those things in partnership with you,” he told the conference.

During a question and answer session nurse Jocelyn Hoffman, from Anita Villa aged care facility at Katoomba, thanked the minister for the $1.2billion commitment but asked: “I have seen too many colleagues leave the aged care workforce because of impossible workloads and low wages. Can you guarantee the $1.2billion will go to nurses and direct care staff only?”

Mr Butler replied that he had asked the workforce advisory group to work on issues such as which staff would be covered by the funding, and whether it would be spread equally across all aged care providers “irrespective of whether they have done the right thing and lifted wage rates. I have my own view about that, but I thought it was important to give the sector themselves – unions and employer representatives – the opportunity to develop answers.”   Mr Butler said the NSWNMA and other unions had helped create a new climate for reform of the aged care industry.

“The clearest message I received from everyone – not just from aged care unions and employers – is the importance of the workforce.

“For example, National Seniors Australia surveyed their members and asked them what they thought their priorities for aged care were, and the number one issue was the workforce.

“At every single forum I went to, older Australians stood up and said, your improvements will be for nought if you don’t fix up the challenge of getting the workers we need and keeping them there.”

Nurse Bevelyn Grant from Wesley Gardens aged care facility, told Mr Butler her employer recently warned that changes to the government’s Aged Care Funding Instrument would result in cuts to direct care.

“They have no hesitation in linking funding cuts to staffing cuts. How do you advise us to address this in our facility?” she asked.

Mr Butler said the government was not cutting total funding to the sector but had made changes to ACFI so that funding would be shared among providers more equally.

“Some providers frankly were answering (ACFI) questions in quite unusual ways,” he said.   “For example, we found a whole lot of providers where 100% of their residents required the absolute highest level of support in medication management. We found some very unusual interactions between complex health care and personal hygiene needs – things that just didn’t line up with our understanding clinically of how ACFI was going to operate.

“Rather than that extra income going to some providers who are using ACFI consultants to maximise their income, and frankly fiddle with these questions that don’t require much clinical evidence to support them, we changed the questions so that the income could be shared more equally.”

He said providers were getting “some very ordinary advice from some of their peak organisations about the impact of these changes.

“It doesn’t work for the sector to say, ‘our income is going down’, while the government’s outgoings are going up. I just encourage you to cross examine these providers about what they say the impact is going to be.”