Home | Industry+Policy | What $1.2 billion will buy

What $1.2 billion will buy


The government has entered talks with stakeholders on how to spend the cash from the scrapped workforce supplement. There is no shortage of ideas. 

Labor may have labelled Tony Abbott the “Christmas Grinch” for it, but few were surprised when, last December, the new government scrapped the Aged Care Workforce Supplement, which would have delivered more than a billion dollars in wage increases to the sector.

The Coalition flagged the move months before in its Policy For A Healthy Life, Better Ageing, which committed them to scrap the entire $1.2 billion Workforce Compact, including the supplement, which would have given workers a 1 per cent pay rise in addition to award increases.

Calling the compact “unionism by stealth”, the Coalition said it would return the money to the general pool of aged care funding to be “distributed in a way that is more flexible and better targeted, without jeopardising the viability of aged care”.

But the section of the Coalition’s aged-care policy document titled “Investing in the aged care workforce” provides no detail on where and how it will allocate the money.

Assistant minister for social services, Mitch Fifield, who oversees aged care, told Aged Care Insite the government was committed to consultation with the sector on the best way to redistribute the funds. Talks began in early February, chaired by professor Peter Shergold, head of the Aged Care Reform Implementation Council.

Insiders say they have concerns about publicly funded aged-care bodies being caught in the new government’s belt-tightening agenda after federal treasurer Joe Hockey repeated in February his pre-election line that the “age of entitlement is over”. But Fifield told ACI the Aged Care Workforce Supplement was scrapped because it wasn’t the “best way to improve outcomes” for workers. He says the priority of the supplement appears to be to entrench union membership in the sector, rather than targeting workforce issues.

Australian Nursing and Midwifery Federation (ANMF) senior federal industrial officer Nick Blake labelled that “rubbish”, and cited union data showing that about 90 per cent of nurses in the sector are already covered by agreements, as well as half of all carers.

Blake says the scheme was aimed at addressing low wages and poor employment conditions – the factors preventing providers from competing in a labour market where the public health system as a whole offers far more attractive incentives. However, the emphasis on enterprise bargaining had discouraged some providers from taking up the supplement, National Institute of Labor Studies senior researcher Debra King says.

Another barrier to uptake, she explains, was the lack of assurance about what would happen when the funding period was up. “Would [aged-care workers] go back on their old wages, or would employers have to cover them?”

King reflects the view of a number of experts ACI spoke to: that the compact was imperfect but demonstrated a “real commitment to improving the conditions of the aged care workforce” as Australia’s ageing population intensifies the country’s aged-care needs. Julie Ellis, senior lecturer in aged care at La Trobe University’s School of Nursing and Midwifery, says ending the plan leaves the government facing a “very dissatisfied aged-care workforce” and “fewer incentives to recruit new aged-care workers”.

So the compact may be on the scrap heap, but if the government is true to its word there is more than a billion dollars back in the “general pool” of aged-care funding. ACI asked the experts where it needs to go and which issues within the sector need the most attention.

A question of pay

In opposition, the Coalition’s aged-care policy was articulated by senator Concetta Fierravanti-Wells, one of the few opposition spokespeople not to be given a corresponding front bench position in Tony Abbott’s first ministry.

Before the election, Fierravanti-Wells warned of “growing and alarming evidence that the aged-care sector cannot provide the care that Australians expect”, and called for “structural reform”.

In a pre-election interview with ACI, Fierravanti-Wells acknowledged the importance of wage rises and said a Coalition policy would likely “contain measures to address concerns in regards to wage and staff retention”. The Coalition’s own policy document acknowledged that “increased pay and improved conditions are essential to attract and retain skilled workers to the sector”.

So what are the numbers?

Enrolled nurses make, on average, 13 per cent less in aged care than they do working in the public sector. That’s according to figures from the Australian Nursing and Midwifery Federation.

Aged-care AINs make between 16 and 18 per cent less than their public sector compatriots, whilst a top RN working in an aged-care facility earns almost $5 less an hour than a similarly skilled public hospital RN.

An experienced Certificate III aged-care worker can make almost 20 per cent less than those in the public sector.

[How do they stack up? Average wages in aged care and the public sector. Aged care and public sector wages.]

Disparity in hourly rates between public sector overall and aged care






Aged Care




% Diff


AIN entry




AIN top




Cert 3 entry




Cert 3 top




EN min




EN max




RN Level 1 entry




RN Level 1 top




Source: Australian Nursing and Midwifery Federation

The ANMF notes that nurses and carers employed in the hospital sector “receive a range of additional benefits that increase their remuneration levels”.

Attracting staff

Workers in the roughly 2800 aged-care facilities around Australia are aged, on average, between 48 and 50 years. That’s a remarkably old workforce.

As with any industry, attracting and retaining staff in aged care is a complex game. Experts are divided on the solutions.

Anna Howe, former president of the Australian Association of Gerontology and a consultant gerontologist, says attracting other care workers is less of a problem, and the turnover rate in aged care is “not worse than the female workforce overall”. But she says the only effective way to attract nurses to the industry is by increasing pay.

Why are nurses of growing importance to the residential sector? Counter-intuitively, perhaps, it’s because people are staying in their homes for longer.

“Over the past decade, people who go into residential aged care have been more likely to enter with more complex needs,” King explains. “It’s very difficult these days to get into low care unless you’ve got nobody around to support you. So people in residential care have increasingly high needs.”

King says workers often go into aged care nursing because they are looking for a particular kind of nursing, or to get into a management stream. The experience can be jarring, she explains, “to go from acute-care nursing where it’s all very focused and clinical, into aged care with a different order of complex problems. Most people don’t understand the difficulty of dealing with gerontology.”

Retaining staff

The levels of worker attrition in the sector are mixed and depend on geography; regional and rural Australia, plagued by workforce issues across the board, suffer much higher rates.

Whilst there aren’t high levels of attrition in aged care generally, the female-dominated workforce includes workers who are often secondary income earners in their families, King explains. They may move between jobs in the same sector to join one that’s closer to home or that works better with childcare responsibilities.

“They’re not leaving because they hate aged care, they’re leaving for other legitimate reasons (such as retirement),” King says.

Experts agree upskilling is key to the retention of aged-care staff. Skills development can both enhance quality of care and help aged-care providers compete in a tough labour market. It also attracts young blood to the sector.

One possibility is for aged-care workers with TAFE certificate qualifications to be designated Certified Care Workers. They could specialise in fields such as dementia care and medication management, and be led by nurses attracted to the industry through better pay and conditions.

LaTrobe’s Ellis agrees that mentoring and upskilling opportunities are key. She says certifications are a good first step that would “address the perception that much of the aged-care workforce lacks qualifications and is unregulated”. But a certification would mean little without on-going mentoring and variation in roles, which would also create incentives.

“Rather than resident allocation, experienced staff could take on roles such as the responsibility of supporting new residents in their first weeks,” Ellis suggests. “Or they could specialise in dementia care or continence care.”

The gerontology association’s Howe says we need to “stop blaming workers and look at management”.

“The most important aspect for many people in the workforce is the culture within which they work,” Ellis says. “In aged care there should be a focus on building and maintaining a positive and happy culture.”

Aged care workers who wish to work more hours far outnumber those who wish to work fewer hours. Ellis explains there is an “existing underutilised capacity that could make a substantial contribution to increasing and stabilising the workforce”.

A smoother transition from casual to permanent employment, particularly in community care, could do the same. Ellis cites research showing two-thirds of the aged-care workforce had been in their jobs for more than a year, and intended to stay in them, whilst less than five per cent had been in the job for less than one year and did not intend to stay.

“The continuing growth of the aged-care industry highlights the need for more attention to be given to realising workers’ intentions to stay, and addressing issues that would encourage workers to stay well before they become dissatisfied.”

Unforeseen challenges in community care

Assistant minister Fifield told Aged Care Insite that the Coalition’s policy would refocus on increasing the availability of in-home arrangements, “where people prefer to receive their care”.

This would include increasing the current ratio of 113 home-care places per 1000 Australians aged over 70 to 125 per 1000 by 2021–22. The Coalition would focus on consumer-directed care, enabling people “greater control over their own lives by allowing them to make choices about the types of care and services they access”.

But King says the government is in for a shock when actions catch up with rhetoric.

“I don’t think the governments are ready for the shift in emphasis to community aged care,” King says. “When you’re talking about the residential sector, it’s about pay, overtime, awards, but it’s all quite transparent and established.

“But in the community sector it’s not just about hourly pay – it’s about how many hours you get allocated in a week, whether it’s consistent, travel time, using your own car and phone – there are a whole heap of hidden costs in community care that add to the pay problem.”

Additionally, King says, few have given real thought to the occupational health and safety issues around providing care in the home.

“Say you’re a cleaner, or providing food in someone else’s home and you realise the rug is a trip hazard,” King says. “What authority do you have to pull up a rug in someone else’s home? Or when someone … wants chicken and eggs and vegetables to be [prepared] on the one chopping board. How can you comply with OH & S needs?”

In this increasingly significant aged-care frontier, King says, many of the most pressing questions have not yet even been asked.

Do you have an idea for a story?
Email [email protected]

Get the news delivered straight to your inbox

Receive the top stories in our weekly newsletter Sign up now