The cost of care has become an even greater source of concern for aged care providers, following the $26.69 per week minimum wage increase determined by Fair Work Australia (FWA) last week.

Outgoing costs are expected to outstrip providers’ income levels, given the combination of the 4.78 per cent award wage increase with the 2.9 per cent rise in CPI and the recent 1.7 per cent aged care subsidy increase.

Providers have since reissued their call to the government to fund the real cost of staff wages, so that they can afford to pay their workers the wages that they deserve.

CEO of Aged Care Association Australia (ACAA), Rod Young, said a subsidy increase around the 3.4 per cent mark, not 1.7 per cent, should be granted to meet the rate of inflation and relieve the cost pressures between now and the expected implementation of the Productivity Commission’s recommendations.

“The 1.7 percent aged care subsidy is a long way short of the 4.78 per cent that FWA has awarded,” said Mr Young.

“We have a 3 per cent shortfall. I think its going to cause extreme pain for the industry as to how providers meet the additional burden of the FWA decision.”

Mr Young said providers typically receive 70 per cent of their income from Commonwealth subsidies and spend 70 per cent of their income on wages.

“We’ve got no other recourse and can’t keep on cutting costs. We have [cut salaries and wages] already and we ask our staff to work hard enough as it is.”
The award increase sees the national minimum wage increase to $569.90 per week or $15 per hour (for a 38-hour week).

CEO of Aged and Community Services Australia (ACSA), Greg Mundy said that providers are not able to pay workers more money, despite the Minister for Ageing suggesting that they should, because the costing figures do not add up.

“We expect the Government will explain the revenue stream in aged care, how there is record funding in aged care, how the Productivity Commission is inquiring into all things aged care,” said Mr Mundy.

“This is all good but increasingly providers can’t balance the books and something will have to give. We are not crying poor Mr Rudd. For many residential and community care providers it is a reality and it is older Australians who will ultimately pay the price – those numbers do add up. Older Australians deserve the best Mr Rudd why can’t you deliver?”

This decision was the first from the new FWA Minimum Wage Panel. The determination will take effect from the first full pay period on or after 1 July 2010.

Australian Council of Trade Unions (ACTU) Secretary, Jeff Lawrence, said the $26 a week minimum wage rise will help 1.4 million workers meet increases in the cost of living.

“Last year’s wage freeze was the last gasp of WorkChoices, and was an insult to the contribution working Australians make to our economy, which sent the living standards of the lowest paid workers even further backwards,” said Mr Lawrence.
 
“This decision will restore some equity and fairness into our economy.”
 

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