Prime Minister John Key says district health boards will not be given more money to raise the pay of low-paid aged care workers because the Government has other priorities in the health sector.
The Human Rights Commission's equal employment opportunities commissioner Judy McGregor today released a damning report into aged care after working undercover in a rest home.
She said workers, nearly all of whom were women earning between $13 and $14 an hour, were subjected to a type of modern-day slavery which exploited the goodwill of women.
McGregor said changes must be made because in less than 10 years New Zealand would need 70 per cent more workers in an industry that turned over a quarter of its staff every year.
She has made 10 recommendations including pay parity between rest homes and DHB care, where pay rates are higher, and an automatic top-10 Cabinet spot for the minister responsible for aged care.
Key this morning acknowledged there were problems with rural rest homes workers paying for their own travel, effectively reducing their wage below the minimum wage of $13.50 an hour.
"Travel is one of those areas where we are looking at what we can do," he told TVNZ's Breakfast programme.
However, the Government could not afford to give DHBs the $140 million required to enable rest homes to pay their staff more.
"It's one of those things we'd love to do if we had the cash. As the country moves back to surplus it's one of the areas we can look at but I think most people would accept this isn't the time we have lots of extra cash.
"You could certainly change the proportion of where you spend money in health. We spend about $14.5 billion in the overall health sector.
"What's going to go to pay the increase in this area? If you said all of the increase is going to go into this area, that would be roughly $600m over the forecast period which is four years... So that would have left us $1bn for other things.
"We put the money into cancer care and nursing and various other things. On balance, we think we got that about right."
The prime minister said the problem wasn't new and despite Labour and the Greens calling on the Government to put more into the sector, the former Labour government "had a lot more cash floating around and didn't meet the bill".
Key said giving the minister responsible for aged care a top-10 Cabinet place was "nonsense".
"Cabinet considers every issue on its merits, not on the ranking of the portfolio minister," he told Newstalk.
The Council of Trade Unions has said DHBs were already facing a $114m a year shortfall following last week's Budget because the net increase of $297m they received didn't cover their costs, if inflation, wage costs and the aging population were taken into account.
Associate Health Minister with responsibility for aged care, Jo Goodhew, conceded pay rates for the sector were at the "lower end" but objected to suggestions workers were being exploited.
"I personally don't believe we should be describing it as modern-day slavery," she told Radio New Zealand.
The Government would consider the report, she said.
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