One of New Zealand's largest rest home providers has reported record profits as debate rages over pay differences at private and public facilities.
Ryman Healthcare has reported an $84 million profit, up 17 per cent on the previous financial year, as Human Rights Commission equal employment opportunities commissioner Judy McGregor releases a report damning of some private rest home caregivers earning as little as $14 an hour.
Their publicly funded hospital counterparts earn an average $17 an hour, and are paid overtime.
Caregivers and union representatives have lobbied rest home providers and the Government for equal wages for almost a decade, Aged Care Association chief executive Martin Taylor said.
In 2005, hospital care wages were increased 20 per cent through a cash injection of $500m distributed by district health boards, he said. "That didn't happen in the private sector."
McGregor's report says pay parity would cost $140m a year.
Ryman Healthcare managing director Simon Challies said the company had been "dipping into our pockets" to increase pay rates.
In the past three years it had received a 1.5 per cent increase each year in funds from health boards for rest home facilities and staff, but other changes meant those staff had more demanding roles to cope with.
"The increasing needs of residents mean we need to put in more staffing hours. The 1.5 per cent annual increase didn't go anywhere near paying for the extra staffing and number of staff. We've been dipping into our pockets from our other earnings for aged care. If the boards and Government want to increase wages, they will have to increase funding."
Wages at Ryman were above the national average of $14.50 an hour, but still lower than in the public sector, Challies said.
Last year Ryman invested more than $180m into its 24 retirement villages and 24 rest homes. It has 2100 rest home beds and 3200 retirement village beds, and less than a third of the funding went to rest homes.
"We've been dipping into our retirement village profits, 75 per cent of our earnings come from our retirement villages. The capital costs for aged care [rest homes] are entirely funded from our retirement villages," Challies said.
As many as 52,000 people will require rest home care by 2026, a 2010 survey found, and Taylor said aged care providers needed to be asked what an acceptable profit was, so enough funding could be available for caregiver wages.
While Ryman's profit was good, not all rest home providers made that much, Taylor said.
The Service and Food Workers Union's Alistair Duncan said private businesses should not be profiting from public money at all.
"Is aged care a service to the community, or is it a business? If you're making a profit, why is that, when aged care is an extension of the health care we give people?"
The majority of aged care workers were receiving as little as $14 an hour, 50 cents above the minimum wage. "Why do we accept that it's OK for employers to pay such low wages in aged care?"
Last week the union joined about 50 organisations in launching its Living Wage Aotearoa campaign, calling on the Government to acknowledge the minimum wage does not provide for adequate living standards.
- © Fairfax NZ News