The Albanese government has proposed a 15 per cent pay rise for aged care workers be funded in two stages over 18 months, sparking anger from unions which wanted the entire wage increase paid as soon as possible.
In a submission to the Fair Work Commission on Friday, the commonwealth said it would fund a 10 per cent increase in July 2023 and a further 5 per cent in July 2024.
The Health Services Union criticised the “devastating delay”, demanding the government explain how it would avoid a “complete collapse” of the workforce.
Awarding the interim 15 per cent rise last month, the commission found the work of aged care workers had been historically undervalued and significant changes to the way they worked over the past 20 years justified the lift in wages.
The timing and phasing in of the pay rises was not determined in last month’s decision and the commission did not rule out a further rise for direct care staff.
It is also yet to rule on a union claim for a 25 per cent wage increase for administrative and support aged-care employees such as cleaning staff.
Aged care is one of the government’s biggest and fastest-growing spending programs, budgeted to cost $27bn this financial year and rising to nearly $35bn by 2025-26, even without incorporating the commission’s wage decision.
HSU national president Gerard Hayes said the union and the aged care sector had expected an immediate 15 per cent rise, especially given inflation was already running hot at 6.9 per cent.
“This is a devastating delay that will see the workforce crumble,” Mr Hayes said. “The initial increase doesn’t come for more than six months and will be mostly eaten by inflation. To delay the subsequent 5 per cent until July 2024 will see the sector crumble.
Mr Hayes said three-quarters of aged care workers had already indicated they would quit aged care in the next six months unless there was a serious pay rise.
“What is the federal government’s plan to prevent a complete collapse? Send in the army, again?” he said.
“The stage-three tax cuts deliver billions in tax cuts to people who don’t need them, and the government thinks that’s a promise worth keeping. Yet when a workforce of insecurely employed, underpaid women win a decent pay rise, it’s fine to breach their trust with delay tactics.”
Mr Hayes said aged care workers would be furious with the delay and he believed it would sever the “last threads of good will”. “If the federal government is looking for ways to fund an aged care pay rise, perhaps it should turn its attention to Medicare, which recent reports suggests is being rorted to the tune of $8bn per year,” he said.
In its submission, the government said phasing in the rise would “allow the commonwealth to implement the proposed interim increase appropriately through its various aged care funding mechanisms”.
“Commencement from 1 July 2023 will also allow implementation of the interim increase to align with the annual indexation of aged care programs, scheduled funding changes to aged care program arrangements and the minimum wage uplift flowing from the annual wage review,” it said.
It cited a number of reasons why it was not feasible for the commonwealth to implement a funding increase prior to July 2023 including that the government did not provide funding directly for wages and associated on-costs in the aged care sector.
“Given that the proposed interim increase applies only to direct care workers, it is difficult to calculate and apply a standard indexation uplift to funding across the various aged care programs,” it said.
The government said it was necessary to ensure increased funding was distributed accurately and there were “appropriate accountability mechanisms in relation to the expenditure of additional funding, which takes time given the diverse program arrangements”.
“The commonwealth supports continuing to improve wages and conditions for aged care workers so that they properly reflect the value of the work performed by those workers,” it said. “However, this must be balanced against the need to ensure these funds are properly targeted, so that they contribute to improving the quality and safety of the aged care system for older Australians.”