“[Non-care staff] are no less in terms of the work they’re doing, and the work they perform, and they should be included immediately with that decision.”
Royal Freemasons Benevolent Institution chief executive Frank Price said the exclusion of non-care staff from the interim judgment “created an us and them” in the organisation’s 22 aged care homes.
“I had my chief of catering ring me up to say ‘here’s this wonderful news’, and I directed her to the appropriate clause and said ‘you’re not covered’,” he said.
“My main problem as the CEO of an aged care organisation is that I now need to manage expectations.”
The commission is still to determine wage rises for support staff and has flagged the possibility of further increases for direct carers.
StewartBrown partner Grant Corderoy estimated the interim judgment applied to about 320,000 people and Labor’s commitment to fully fund the increase would cost taxpayers about $1.9 billion per year.
The annual cost of the FWC judgment is expected to increase by hundreds of millions of dollars after the final ruling is handed down, when 100,000 additional allied health, catering, cleaning, laundry and maintenance staff are expected to receive a pay rise.
The cost estimate is based on StewartBrown’s aged care survey, which covers 55 per cent of all aged care homes in Australia and asks providers for information on average hourly rates.
Last month’s budget identified aged care as one of the fastest growing areas of federal government expenditure, with taxpayers expected to spend $27 billion on aged care services this year.
The figure is forecast to hit $34.7 billion by 2025-26, even before incorporating the cost of the pay increase.
Mr Corderoy said the $1.9 billion annual estimate included $470 million of on-costs like superannuation leave entitlements, workers compensation premiums, and payroll tax incurred by for-profit providers.
However, he said it was unclear whether the government was also committing to pay for the additional costs associated with a pay rise.
A spokesman for the Department of Health and Aged Care said the government was working through the details of the interim decision.
“The government has committed to fund the outcome of the decision, and will be engaging with stakeholders, including unions, providers, peaks and consumer groups, on the implementation of the decision prior to hearings on the 22 November, 2022.”
Mr Corderoy said the 15 per cent pay increase also added an extra $245 million per year to the cost of the Albanese government’s $2.5 billion commitment to introduce 24/7 nurse coverage in residential care and increase daily care minutes from 200 to 215 from October 2024.
Last month’s budget papers reveal the federal government deposited an undisclosed sum into a contingency reserve to meet the cost of the pay rise.
Bupa Villages and Aged Care Australia managing director Andrew Kinkade said the government recognised a broad suite of reforms was required to address workforce shortages.
“[The interim decision] represents a $4 per hour increase for the average carer and is an important first step towards recognition of the critical role our aged care workforce plays in caring for our elderly,” he said.
StewartBrown’s Mr Corderoy said the pay rise would encourage people to join the aged care sector, but it was not a silver bullet.
“More needs to be done, both in terms of remuneration and other conditions to attract more staff ... So this will solve part of it, but it’s only part of a strategy to attract more staff.”
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