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Economic outlook mixed, health sector wages up: conference

The 9th annual Australian Healthcare Week began in Sydney last week, and nursing and aged care were front and centre.

Early in on the first day, the conference was given an economics rundown by Westpac senior economist Matthew Hassan, and despite slow economic growth, health workers wages are performing better than any other industry.

According to Hassan, world economic growth remains subdued, and after 27 years of uninterrupted growth, Australian GDP growth has suffered an abrupt slowdown in the second half of last year and into the first part of 2019.

Dipping below 2 per cent growth – where between 2 and 3 per cent is “on par” – the Australian economy is staring to be classed as weak.

The steep drop in housing prices – concentrated in Sydney and Melbourne – is potentially problematic for those looking to go into residential care or retirement living as it affects their liquidity.

However, post GFC, Aussies became vigilant savers (savings as a percentage of income rose), Hassan told the crowd, and he predicts the same thing will happen as housing prices drop, therefore this boomer cohort of retirees may be better equipped to deal with later life finance and a move to aged care.

Another area of concern for Hassan is the trifecta of a soaring population, slow economic growth and the looming federal election.

During the elections of 2013 and 2016, the country experienced a hiring freeze over a six-month period due to uncertainty and Hassan predicts that this may occur again. He also sees the possibility of rising unemployment as the population grows and the economy slows.

Despite all this, at the minute, Government spending in health is strong, and healthcare wages growth is outpacing the average of all other industries. This could be due to a rise in the minimum wage and increasing healthcare demands.

Hasssan also sees the royal commission as a potential positive driver for the future.

He told the conference that there will be a strong demand for properly delivered aged care, especially home care and this period is a “window of opportunity” to reshape the industry and to get it fit for purpose as we enter “the most important period in the history of the sector”.

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