A hard-fought settlement offer for public nurses is a headache for the aged care sector.
A group representing the largest providers of healthcare in New Zealand is accusing Te Whatu Ora of deliberately underfunding it in the wake of the pay equity settlement offered to public sector nurses.
Yesterday, Te Whatu Ora – Health New Zealand upped its pay equity offer for public health system nurses by another $1.5 billion as part of resolving a long-running dispute.
The total offer is now worth $4bn.
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If nurses vote to approve the offer it will see Te Whatu Ora’s registered nurses earning between $69,566 and $99,630 get a 4.5 percent pay boost and senior nurses get a 6.5 percent rise, which would take their pay to a maximum of $153,060.
The proposal also includes a $15,000 lump sum payment as back pay.
The deal is on top of a 14 percent pay equity bump approved earlier this year.
The problem for the people running residential aged care facilities, which are often private sector providers, is the pay rise doesn't apply to their nurses. So the new deal simply increases the likelihood aged care nurses will jump ship to public hospitals.
New Zealand Aged Care Association chief executive Katherine Rich said the settlement offer was great news for the Te Whatu Ora nurses after decades of gender-based underpayment, but it spelt trouble for the private aged care sector.
“Today’s offer, if accepted by Te Whatu Ora nurses, will once again widen the pay gap between Te Whatu Ora nurses and those who work in aged care,” Rich said.
“The Government funds both aged care and the public system. It now appears to be a deliberate decision to pay nurses in aged care less.”
She said aged care nurses were treated like second-class citizens compared to the hospital-based nursing workforce, being expected to provide the same quality care as all other nurses, just for less money.
“We don’t begrudge the gains for Te Whatu Ora nurses, but it means that aged care is always playing catch-up with nurses in the public system. It is no wonder that the sector is finding it hard to attract and retain the nursing staff we need to care for New Zealand's seniors.”
Aged residential care organisations, which provide hospital-level care to elderly residents, have long complained that chronic underfunding from central government has seen the sector shrink – public sector pay rates rises for staff just make the problem worse.
The industry, which has some 40,000 beds compared to the public health system’s 13,000 odd beds, receives a daily rate per bed from government to provide care. But this rate hasn’t kept up with inflation, making the industry largely unworkable, industry leaders say.
Despite predicted demand for more than 15,000 new beds by the end of the decade, the number of beds actually available shrank by more than 1200 in 2022. Many facilities are continuing to reduce the number of beds available and cut non-premium care options.
During its recent and ongoing negotiations with Te Whatu Ora, the private aged care sector failed to get reassurance the gap with the public health system wouldn’t continue to widen.
The negotiations aimed to achieve pay parity with the public health system, but in the end only $20m of additional funding was set aside in the first tranche of money, and the sector previously told Newsroom it had very little confidence in a better outcome the second time around.
That second tranche of funding is currently being finalised and will be backdated to July 1.
According to Te Whatu Ora community health system improvement and innovation group manager Mark Powell, the second tranche will work out to $97m annually, which he said was a significant investment in the aged residential care workforce and had received good industry feedback.
"We acknowledge that if the Te Whatu Ora nurses' pay equity offer is accepted, it will increase pay disparity with the funded sector, including aged residential care.
"As part of accepting pay disparities funding, providers including those in aged residential care must report data about pay rates to Te Whatu Ora to demonstrate how the increased funding has reduced the pay gap."
Te Whatu Ora expects to report back to the Government about the first tranche of the initiative by the end of September.
Any aged care beds currently being built are largely coming from large retirement village operators, which use them as something like a loss leader to get residents into their villages and provide them with a continuum of care.
This raises equitable access issues for those who don’t have a home to sell to buy a retirement village unit.
