Staff deserve cut of aged care profits

Staff deserve cut of aged care profits

It's time for shareholders to question why caregivers are among the lowest paid workers in New Zealand.

I see the aged care provider Ryman Healthcare is one of the best performing companies on the sharemarket, and has returned on average 19 per cent to its shareholders over the past decade. It has its sights set on becoming the No1 company on the New Zealand Stock Exchange.

Other aged care providers such as Metlifecare and Summerset are also performing well, and are fast becoming the darlings of the sharemarket.

That's great news for people with shares in these companies. But it provides little comfort for the 30,000 aged care workers in the sector, many of whom are paid at or just above the minimum wage.

The average wage for caregivers working in aged care is around $14.40 an hour, for work that is highly demanding and often stressful.

By contrast, the people who run companies such as Rymans and Metlifecare are paid well and enjoy excellent wages and conditions, according to company annual reports. Some earn in excess of $500,000 a year, and are also allocated shares in the companies they run.

So perhaps it's time for shareholders to question why it is that caregivers, who provide the bulk of the care that these high performing companies are built on, are among the lowest paid workers in New Zealand.

Why can't some of the profits that are earned in the aged care sector trickle down to caregivers, so that they can earn a decent wage too?

Looking after frail older New Zealanders is extremely hard work, as former Human Rights Commissioner Judy McGregor discovered when she worked as a caregiver for a week last year.

Increasingly, caregivers are doing jobs that would normally be considered the domain of nurses, such as giving medication to residents without supervision, according to a Nurses Organisation survey.

Yet many have no training for this important work, or previous experience of working with older New Zealanders.

Caregivers are one of the few unregulated workforces in New Zealand. There's no regulatory professional body; no minimum training or qualifications needed to work as a caregiver, and some walk off the street and begin work immediately.

Surely it's in the interests of the companies who run rest homes to rapidly increase the training, qualifications and career prospects for the staff they employ?

Aged care is undergoing rapid expansion, and retirement villages are popping up like mushrooms all over New Zealand. Most retirement villages have rest homes and hospitals attached to them, and that is part of their appeal.

But unless there's a substantial improvement in wages and conditions, how are providers going to recruit and retain the qualified staff they need to run these facilities?

Already, there's an acute shortage of nurses across the sector, partly because nurses are paid substantially less than nurses in public hospitals.

Caregivers are also paid up to $5 less an hour than health care assistants working in public hospitals, who do equivalent work. Many are paid the minimum wage, even after years of working in the sector.

So it's not surprising that there is a turnover among caregivers of around 40-50 per cent a year. A recent industry report estimates that just 50 per cent of caregivers stay with an employer for more than four years.

These extremely high turnover rates are obviously unsustainable in a sector that is rapidly expanding and so it's clear that much more needs to be done to attract and retain staff.

Aged care providers argue that their profits come from building and running retirement villas, not from running rest homes, and that it is the Government's responsibility, not theirs, to increase funding to the sector, so that wages and conditions can be improved.

Last year, rest homes received almost $1 billion in taxpayer funding.

And there's no disputing that more funding is desperately needed for the rapidly expanding sector.

But if aged care providers are to get more taxpayer funding, at a time when some are making handsome profits, surely they should be expected to be publicly accountable for that funding, in the same way that public hospitals are.

At present there's no obligation on providers to publicly account for how taxpayer funding is spent. Rest homes are audited, but this doesn't extend to monitoring how government funding is spent. This means there's no way of tracking whether additional funding is going into areas such as increased wages, or for other purposes such as building maintenance and capital expenditure.

Surely it is reasonable to expect that aged care providers should account for how taxpayers' money is spent, as other sectors who receive government funding are expected to do?


Sue Kedgley