The new Government's termination of the previous Government's Aged Care Workforce Supplement will prevent as many as 140,000 aged care staff from being disadvantaged by criteria that would have seen up to 40 per cent of aged care services ineligible for wage funding.
Last night's joint announcement by Social Services Minister Kevin Andrews and Assistant Minister Senator Mitch Fifield of the suspension of the Aged Care Workforce Supplement was accompanied by a pledge to consult on how aged care wages could sustainably be improved.
Catholic Health Australia CEO Martin Laverty, representing the largest network of aged care services in Australia, said the previous Government's Aged Care Workforce Supplement was flawed and that its abolition was in the equitable interests of all aged care staff.
"In July last year, CHA said to the then-Gillard Government that aged care providers would be willing to see the $1.2 billion that was taken from the Aged Care Funding Instrument (ACFI) flow to better wages if effort was put into productivity gains and wage rises were fully funded.
"CHA and other aged care provider organisations spent the better part of six months in late 2012 seeking to negotiate with unions a Workforce Compact that fully funded aged care pay increases and didn't require forced industrial agreements.
"At one point, we came close to such an agreement that would have delivered fully-funded pay increases to all staff. Regrettably, unions rejected the fully-funded pay increases by setting wage rates at levels that many aged care employers could simply not afford," Mr Laverty said.
A CHA survey released in April found as many as 40 per cent of aged care employers would not be able to access the previous Government's wage funding because wage rates had been set at unaffordable levels.
"If the Aged Care Workforce Supplement hadn't been wound up, a large group of staff working in aged care services would have been denied access to wages funding because the poor design of the previous Government's scheme locked out up to 40 per cent," Mr Laverty said.
"An Aged Care Financing Authority report released in July found 30 per cent of aged care providers failed to break even in the preceding year. If you can't break even, you can't cover the cost of unaffordable wage rates. Unions knew this, but they missed the opportunity to strike a more workable agreement," Mr Laverty said.
Mr Laverty welcomed the new Government's intention to consult with aged care providers about how the remaining portion of the $1.2 billion in ACFI funding should now be applied. He said the proposed consultation should kick-start a new agenda on productivity gains in the aged care sector.