The federal government has promised to fund an increase in aged care workers’ wages, telling the Fair Work Commission pay rates in the sector should be “significantly higher” without nominating a figure.
Ministers argued low pay provided little incentive for people to work in the area, leading to chronic workforce shortages that jeopardised the care of Australia’s ageing population.
Unions have asked the commission to consider a 25 per cent pay rise for aged care workers and nurses. They argue aged care workers have been historically undervalued because of the feminised nature of the workforce and their jobs.
The Commonwealth submission, lodged on Monday, backed this argument.
It said the evidence before the commission supported the claim that “‘invisible’ skills, broadly describable as social and emotional and interpersonal skills” had not been fully valued under previous wage deals.
“The commission should find … that the current award rates significantly undervalue the work performed by aged care workers, for reasons related to gender,” it states.
Ministers Tony Burke, Mark Butler and Anika Wells said a pay rise was crucial for the future of the sector.
“If we don’t start paying aged care workers properly, we won’t be able to attract and retain enough staff to care for our loved ones as our population ages,” they said in a joint statement.
Employers – represented by Aged and Community Services Australia, Leading Age Services Australia and Australian Business Industrial, the industrial relations arm of lobby group Business NSW – agreed there did not appear to be appropriate wage rates set for the sector but opposed an increase as high as 25 per cent.
The government submission noted the cost to business would “likely be substantial”, depending on the final decision, but said the commission should rest easy knowing taxpayers would fund the wage rise.
“The Commonwealth will provide funding to support any increases to award wages made by the commission in this matter and that will help deliver a higher standard of care for older Australians.”
Burke, the workplace relations minister, said there was no doubt the work of aged care staff was undervalued.
“Aged care work is hard work. The pandemic made it even harder,” he said.
“Our government is prioritising these workers as we fight to get wages moving again.”
The previous government had said it would not make any commitments about helping to fund any significant increase in wages until it saw the Fair Work decision.
Health Services Union national president Gerard Hayes said the promise to fund any increase was “the decent thing to do” on the government’s part.
“We are very, very confident we’ve made an incredibly strong case for a 25 per cent increase,” he said.
A 25 per cent rise would put the aged care sector on a competitive level with other health services and help it attract more staff, he said.
There are 365,000 workers across aged care facilities and in-home care, with 83 per cent of them women. About two-thirds are employed on a permanent part-time basis.
The aged care royal commission recommended government, unions and employers work together on a case to boost pay and attract more staff to the sector.
Health Department modelling suggests the workforce needs to increase by 6.6 per cent a year over the next five years to meet the growing demand.
Separate Treasury modelling found a 25 per cent increase to wages could increase labour supply by between 5 and 10 per cent. However, it warned that in the current environment, such an increase in wages could further push up inflation if it prompted workers in other sectors to seek similarly large pay rises.
Wells, the aged care minister, said a boost to wages would help close the gender pay gap as well as start to fix chronic workforce shortages.