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$31m Minimum Wage Impact on Aged Care Funding

27 January 2006

$31m Minimum Wage Impact on Residential Aged Care Funding

Increasing the minimum wage from $9.50 to $10.25 will require an estimated $31 million dollars funding boost for the aged residential care sector.

Modeling undertaken by Healthcare Providers NZ shows that the cost of increasing the minimum wage for rest home staff will be about $31 million dollars. The modeling is based on maintaining the existing relativities between the minimum wage and what is paid to caregivers and other non professional support staff.

"We support an increase in the minimum wage, and we accept that caregiver wages are too low. However, this sector relies on government funding, and maintaining relativities between the minimum wage and caregivers' wages cannot be achieved within existing funding levels", said Martin Taylor, Chief Executive of Healthcare Providers New Zealand.

"The minimum wage increase will come at a time when the full impact of the NZNO MECA is being absorbed by providers. This is another cost to the sector relating to a government initiative that has yet to be properly funded".

"The only way the Government can expect providers to bear the cost of the minimum wage increase, on top of the impact of the NZNO MECA and inflation is to make sure this year's budget allocates sufficient additional funding to cover these extra costs".

"We are confident that there is some understanding of the pressures on the sector following positive statements from the Minister about this year's budget, and after the Prime Minister committed to strengthening the aged care workforce in her speech from the throne last November", said Martin Taylor, Chief Executive of Healthcare Providers New Zealand.


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