Nurses' pay deal adds to building pressure in retirement sector

Tuesday 7th August 2018

The settlement between hospital nurses and their district health board employers - coupled with current immigration settings - adds to growing pressure in the retirement sector and if steps aren't taken people may eventually have to be turned away, says Summerset Group chief executive Julian Cook.

Earlier today the New Zealand Nurses' Organisation announced nurses voted in favor of the latest pay offer from the government, staving off further strike action and bringing nearly a year of negotiations to an end. The deal is thought to be worth around $520 million.

Against that backdrop, the DHBs need to "look at this seriously and effectively pass on sufficient funding to allow us to match those wage increases," Cook told BusinessDesk.

"Whether you are working in DHB or aged care, you are still in the health sector and its paid for by the government and it should be funded so they have quality of staff," he said.

Cook echoed recent comments made by Oceania Healthcare chief executive Earl Gasparich, who said the aged care sector is still predominantly funded through the DHBs, "so our ability to lift wages is somewhat linked to the funding we receive from the district health boards."

The DHBs agreed to a 2 percent funding increase in July with the sector and the deal included an undertaking they would come back to the table after they reached a settlement with the New Zealand Nurses' Organisation.

"They said they would come back to the table. They made no commitments as to what they would do after they were at the table," said Cook.

"We think it is really important that the industry and DHBs sit down and basically pass on enough funding to allow the aged care sector to match those increases," he reiterated.

Summerset, like other retirement village operators, is currently expanding its businesses to benefit from increased demand as people born in the country's post-war era reach the target age for operators. However, the other pressure "which is really building" is related to immigration changes made by the previous government "that are really starting to bite," said Cook.

"Unless this stuff is dealt with, you are going to see shortages come within the next few years and if you keep playing it through people are going to have to start turning people away from these facilities unless we get on top of this," he said.

According to Cook, the current government has "a real opportunity" to get on top of the issue and should look at including nurses on the long-term skills shortage list and changing the setting around the so-called stand-down period for caregivers.

Under current settings, once someone has spent three years working in New Zealand in lower-skilled employment, they will be required to spend 12 consecutive months outside New Zealand before they can be granted another Essential Skills Work Visa for lower-skilled employment.

The result is fewer people coming into the country to take on some of these roles, he said. "The reality is that in some parts of the country there just aren't people who can or want to do the job," he said.

(BusinessDesk)

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