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Private takeover of rest homes a possible threat

12 July 2005

NZNO sees private takeover of rest homes a possible threat to aged-care workers and rest home conditions

In the midst of what appears to be massive private takeover of aged health care facilities, the New Zealand Nurses Organisation (NZNO) welcomed long-awaited and desperately needed new government funding for aged care providers.

NZNO officials hope that much of the estimated $44m promised since last December will be passed on to health care workers to help compensate for years of poor pay, low staff levels and bad working conditions.

“Aged health care is the forgotten poor cousin of the New Zealand Health industry,” says NZNO Organiser Jane Kostanich. “The average wage of residential health care workers is $10.82 an hour. These are the people taking responsible care of people who often can’t take care of themselves. They deserve better.

“The present state of residential aged care is appalling. It has reached a point where even the best and largest of charitable and religious agencies are pulling out. Fewer trained care givers, fewer available beds, and an increasing number of unit closures are expected to handle the rapidly increasing numbers of elderly New Zealanders seeking aged care.”

Jane Kostanich says the announcement today that giant Australian-based DCA Group bought New Zealand’s biggest aged-care business Guardian Healthcare Group for $300m is worrying. If approved by the Overseas Investment Commission, the transfer will involve almost 2,200 residential age-care beds and an additional 380 units and apartments in 32 facilities, most in the Wellington region.

The Guardian Health Care Group recently offered rest home staff a two per cent wage increase that was rejected. The company then secured an instant $70m profit from the sale, after having owned the business for less than a year.

“We need to remember these corporations exist solely for profit. If the welfare and religious groups are not able to sustain the low funding, where do the new owners think their profits will come from?”

Jane Kostanich says the usual practice is to skimp on labour costs. “It means fewer people, untrained, and at lower wages. The result means hardship for thousands of vulnerable older New Zealanders.”

The 40,000-strong New Zealand Nurses Organisation won a massive nation-wide collective agreement with District Health Boards last year, and is working to establish a multi-employer collective agreement throughout the primary care sector.


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