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Age Care Budget Announcement Not What It Seems

30 May 2005

Minister Confirms Residential Age Care Budget Announcement Not What It Seems.

In a RNZ interview last Friday Pete Hodgson confirmed provider's fears that the $71 Budget boost for residential aged care may be spent by DHBs on other services, i.e., there is no guarantee it will go to residential care providers.

The Minister's Budget press release titled, '$71 million boost for residential aged care', proclaims, 'The money is for 2005-06 and will go to District Health Boards (DHBs) to pay for contracted providers of residential care services'.

The press release gives the clear impression the money is for contracted providers of residential care services. However when the Minister was asked the question, 'Where is the guarantee the money will go into aged care?' he replied, 'Well, there is no guarantee'.

The Minister then went on to say DHB's can spend the money where they wish, and that they may choose not to spend it on contracted providers of residential care services.

"In light of the information provided by the Minister our criticisms of the Budget are entirely appropriate. It's clear the Budget announcement on aged residential care was over spun. The reality is that the majority of the $71 million will be spent on services other than residential care".

It is also clear that $32.5 million of the money is back pay for DHBs who have been underfunded by government in the past for residential care services. Only last week the Hawke's Bay DHB revealed that it had been underfunded for aged residential care to the tune of $2 million a year.

The Minister also said the budget gave HealthCare Providers NZ what we asked for. This is incorrect. We asked for 5% per year, accumulative for three years, (i.e., 15%) plus inflation and compensation for nurses MECA.

Over three years this would mean an increase of over 20% in the Aged Residential Care contract. This increase would address the funding gap, a gap quantified by the government funded Price WaterHouse Coopers Report in 2000. "At the end of the day, the Budget announcement goes no where to addressing the crisis in aged care", says Martin Taylor CEO of HealthCare Providers NZ.


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