Aged care staffing budget hole, nurse shortage to weigh on new government

Both major parties are refusing to outline how they will pay for looming cost increases in aged care, with the Coalition slamming Labor’s “blank cheque” promise to fund higher wages, while declining to rule out hiking resident contributions.

Prime Minister Scott Morrison said the government would work to ensure “Fair Work Commission decisions are honoured”, refusing to match Opposition Leader Anthony Albanese’s promise to fund the staged wage increase expected to be awarded by September.

Aged care is going to cost more and the major parties are not saying how the increase will be funded.Credit:Virginia Star

The Coalition and Labor have both ruled out introducing a new taxpayer levy to pay for the growing cost of aged care, which outstripped funding to state hospitals for the first time in Tuesday’s federal budget with $27.8 billion allocated for 2022-23.

Government Services Minister Linda Reynolds revealed during a Senate estimates hearing on Friday that the government’s commitment to fund an increase in care minutes to 200 minutes per aged care resident, per day, by October 2023 was not yet funded, saying it was unclear which providers needed to increase staffing.

“We are doing due diligence with the sector … it will be funded,” Senator Reynolds, appearing on behalf of Aged Care Services Minister Richard Colbeck – who was isolating with COVID-19 – told the committee.

Health Department Secretary Brendan Murphy told a hearing on Friday the department expects to make a submission to the commission, saying “a wage disparity between the aged care sector and the rest of the health sector … is an issue in attraction and retention of staff.”

If the Health Services Union wins its case at the commission, minimum wages for personal care workers would rise by 25 per cent – almost $6 an hour, from $23.67 to $29.58 – putting them on par with disability workers with the same qualifications.

Macquarie University health economist Henry Cutler said the sector needed an extra $5 billion a year and that aged care should be financed according to elderly Australians’ ability to pay, “especially those with assets worth millions in housing.”

Finance Minister Simon Birmingham, when asked if the Coalition would force consumers to pay more for aged care as former Liberal treasurer Peter Costello has called for, said the government was “not proposing any changes”.

The party that wins the coming federal election will also face the challenge of finding 14,000 extra aged care nurses by next July, to meet the commitment already made by the Morrison government to put a nurse in each home for 16 hours a day and increase care minutes.

Former NSW Liberal Premier Mike Baird, chief executive of aged care provider HammondCare, told Sky News extra nurses would “make a big difference” but that the challenge “is going to be where they come from.”

“They’re not just going to turn up,” Mr Morrison said of the nurses. He warned that aged care facilities could be forced to close if Labor brought forward the government’s commitment to mandate 24/7 nurses in all homes by July 2023, a year earlier than the Coalition.

Labor’s aged care spokeswoman Clare O’Neil said while it was “a big commitment” to find the extra nurses needed by next July, “there are lots of people who would love to work in aged care” if they were properly paid and supported.

Opposition finance spokeswoman Katy Gallagher said while the party’s preference would be to source the extra aged care staff locally, workers may have to be recruited from overseas.

UnitingCare national director Claerwen Little, who heads one of Australia’s largest aged care providers and has estimated the expected wage hike will cost $4 billion a year, called on the government to match Labor’s commitment.

Senator Birmingham slammed Mr Albanese’s pre-election pledge as “excessive” while also acknowledging the potential future cost, referring to the budget’s statement of risks, which says spending on “demand-driven programs” is subject to change.

Mr Morrison would not say how much the Treasury had set aside in its contingency fund for aged care wages, which are not specifically mentioned in the budget, but said the government would not introduce any new taxes if he renewed his term as prime minister.

“It’s impossible to know what that is,” he said. “We’re aware of those risks.”

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