Pay equity deal a good one but impacts likely to include negatives

EDITORIAL

The historic deal signed off by the Government this week, which will see big pay increases for 55,000 predominantly female aged care and disability support workers, is a major step forward for pay equity and for our low-wage country — but one that will likely see growth pains across the economy in coming years.

These dedicated but traditionally underpaid workers will go from earning $16-$18 to $19-$23 from July 1, stepping up to $27 for experienced care workers over the next five years at a cost of more than $2 billion over that time.

Most of the extra cost will be taxpayer-funded but there will also be estimated fee increases of $60 to $100 a week for the third of people in resthomes whose assets are over $220,000. Higher aged-care costs for the country will continue to rise as our fast-ageing population requires more support staff, and as fast-rising pay packets over the first five years settle in at higher levels.

As well as making a huge difference to the lives of these workers and their families, our elderly people who they care for can look forward to a more stable, happier and better-qualified workforce caring for them.

The Government says the deal responds to a particular set of circumstances and the framework established through negotiations, which will now be consulted on, sets a high hurdle that will not be applicable to many other sectors. Some unions disagree and appear set to lodge challenges to the framework, and numerous claims.

While the Government has tried to dampen such expectations, the deal will also add to wage inflation across the economy. Overall that will be a good thing as our wages are low compared to other developed nations, but the principal cause of this has been anaemic productivity growth of about 1 percent a year over the past four decades.

Unfortunately many businesses will have to find the productivity growth required to meet higher wage expectations by investing in the host of new technologies that replace workers, as well as trying to motivate fewer staff to be more productive. Wage inflation will also spill over into price inflation.

The historic deal signed off by the Government this week, which will see big pay increases for 55,000 predominantly female aged care and disability support workers, is a major step forward for pay equity and for our low-wage country — but one that will likely see growth pains across the economy in coming years.

These dedicated but traditionally underpaid workers will go from earning $16-$18 to $19-$23 from July 1, stepping up to $27 for experienced care workers over the next five years at a cost of more than $2 billion over that time.

Most of the extra cost will be taxpayer-funded but there will also be estimated fee increases of $60 to $100 a week for the third of people in resthomes whose assets are over $220,000. Higher aged-care costs for the country will continue to rise as our fast-ageing population requires more support staff, and as fast-rising pay packets over the first five years settle in at higher levels.

As well as making a huge difference to the lives of these workers and their families, our elderly people who they care for can look forward to a more stable, happier and better-qualified workforce caring for them.

The Government says the deal responds to a particular set of circumstances and the framework established through negotiations, which will now be consulted on, sets a high hurdle that will not be applicable to many other sectors. Some unions disagree and appear set to lodge challenges to the framework, and numerous claims.

While the Government has tried to dampen such expectations, the deal will also add to wage inflation across the economy. Overall that will be a good thing as our wages are low compared to other developed nations, but the principal cause of this has been anaemic productivity growth of about 1 percent a year over the past four decades.

Unfortunately many businesses will have to find the productivity growth required to meet higher wage expectations by investing in the host of new technologies that replace workers, as well as trying to motivate fewer staff to be more productive. Wage inflation will also spill over into price inflation.

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Bruce Groves - 5 days ago
Your last paragraph begs the question: Isn't that what being a business-owner is all about anyway? The only difference is that the current situation adds the morality quotient of not keeping all the profits to yourself, but distributing some in the form of higher wages to your staff. With regards to the topic of aged-care and disability-sector workers, the sector is still left with a lack of able staff, i.e. either experienced, or qualified, or with the necessary compassion and work ethic. It is still a system governed by those that determine how much an individual person (requiring support) is entitled to receive based on their physical needs but negatively adjusted because of their assets - assets they have worked hard for, paid taxes, and contributed to society for many years, not bludged off the taxpayer for all or most of their lives and get full health-care entitlement just because they have no assets to show for their (lack of) contribution to society.

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