ANIKA WELLS, AGED CARE MINISTER : I am delighted to be here with my wonderful colleague David Smith and Treasurer Jim Chalmers for what is a seismic shift in aged care in Australia. Today we turn the corner for aged care in Australia. You would have heard me say for nearly a year now that I am ambitious for aged care and today we announced what will be in the Federal Budget on Tuesday night which is $11.3 billion dollars for a pay rise for aged care workers. Long deserved, long awaited for, and now with a Labor Government it is here.
What that means for aged care workers, if you’re a personal care worker who’s watching this morning and on the way to the afternoon shift tonight, that means for you nearly $140 a week extra or $7,000 a year extra in your pay packet. If you are a registered nurse, it means $198 a week extra or nearly – more than $10,000 a [year] extra. That is life changing money for people. And for us as a Labor Government that really helps right a wrong where the care economy has long been undervalued in this country. And today’s historic pay rise – the biggest pay rise ever for this sector in the history of federation – starts to address that wrong.
The other element I’d note is that we are delivering an historic increase to the daily rate for residents in aged care. The previous rate – the previous indexation rate – which is what government gives providers as the cost of delivering the service – was 1.7% last year. One of the last decisions the Morrison Government made was to award that indexation rate at a percentage of 1.7%.
Today’s announcement, when you total it all up, is a 17% increase per resident per day in aged care. That is enormous. And that properly and fairly addresses the costs of delivering quality aged care in this country. I am so grateful to be the Aged Care Minister to be able to deliver that. I’m so grateful to people like Stephen Holmes and Goodwin Village who have been delivering things like 24/7 nurses for years here at Goodwin Village. And I’m so grateful that I have a Labor Treasurer in Jim Chalmers who has backed aged care workers in all the way to deliver this pay rise. So, I’ll hand you over to him.
JIM CHALMERS, TREASURER: Thanks very much, Anika, and well done securing this historic pay rise for aged care workers. Thanks, Dave, for having us at this really quite beautiful facility. To Stephen and his staff, Libby as well and the wonderful people that we met this morning.
This is the pay rise that aged care workers need and deserve, and we are very proud today to be delivering it. You know, this is what’s possible when we put the national Budget on a more responsible and more sustainable footing. The pressures on the Budget are substantial across whether it’s the interest costs on debt or the NDIS, aged care, health care and defence. The pressures on the Budget are substantial, and we’ve gone out of our way here to make sure that we can afford, that we can work through in a responsible and methodical way this historic pay rise for aged care workers today.
Next Tuesday’s Budget will make really important investments in workers but also in the care economy more broadly. And the Budget will be all about responsible cost of living relief, it will be all about cleaning up the mess that we inherited in the Budget, and it will also be about investing in the long-term drivers of growth in this country, and the care economy needs to be front and centre in our efforts and it will be front and centre in our efforts.
When it comes to inflation, decent wages for working people is part of the solution, not part of the problem. Now, we’ve made it really clear that when it comes to working people dealing with the cost-of-living pressures that they confront right around Australia, decent wages growth is part of the solution, not part of the problem. And the decision that we are announcing today reflects that reality.
I’m really proud to be here with Anika and Dave. I’m really proud of what the Albanese Government has been able to deliver for the aged care workers of this country. Aged care workers deserve more than our thanks for what they’ve done to get our people through some difficult years in recent times. This is the pay rise that aged care workers need and deserve, and we’re proud to be delivering it. Over to you.
JOURNALIST: Can I ask a question to Minister Wells. Not every aged care worker is on award wages, some are working in the private sector or on EBAs. How do you make sure that they get their [indistinct]?
WELLS: Well, this will impact 250,000 aged care workers across the country, like you say, some of which are on awards, some of which are on the EBA. What we know is that we have paid, or we have funded this agreement to more than what was required to get the 15% of the award done for aged care workers. And also, what we know is that providers have been working very closely with us and unions since this decision was made back in February to make sure that we could pass on the full freight to workers in this country.
There are plenty providers out there who have already pledged to pass on the full amount to workers whether they are on the award or above on the EBA. And I absolutely welcome that. And what we have done is created a schedule with providers and with unions so that any aged care worker in this country will be able to look up what they should be getting by way of pay rise and to make sure that they do get it in discussion with their employer and with their union. And we will also be publishing as of 1 January next year what providers are paying their workers and they will have to attest to us in quarterly financial reports that they have passed that full freight on.
JOURNALIST: So, no legal obligation but the pressure of moral obligation?
WELLS: The legal obligation comes with the award, and it is the law to now pay 15% above the award. Beyond that for people who are paid on things like the EBA there is the public pressure of the transparency of this information being provided as of 1 January.
JOURNALIST: Treasurer, what do you say to comments made by Snowy Hydro Chief Executive Paul Broad this morning that Labor’s target to reach 80% renewables by 2030 is bullshit and we will have blackouts as base load power plants retire?
CHALMERS: Well, unsurprisingly we don’t share that view. We’ve got an ambitious, comprehensive plan to get more cleaner and cheaper energy into the system. And the Budget that I hand down on Tuesday night will have cleaner and cheaper energy at the very core of our plans to grow the economy. Those targets, those measures and policies that we’ve announced over a period of time now, we’ve worked through them in a methodical and considered way. We’re confident we can get more cleaner and cheaper energy into the system. Our policies reflect that, and we’ll see that in time.
JOURNALIST: Isn’t it inevitable that residents are going to have to pay more? These are enormous numbers in pay indexation. Are you concerned about the flow on effect in other areas of the care sector, like a 15% pay rise might flow on to [indistinct]?
WELLS: Well, I think the important thing to note here is that we are paying for this. We are paying for 24/7 nurses. We are paying for an increase to candidates. We are paying for the pay rise. StewartBrown, who is the aged care accountant that everybody uses, estimated this pay rise would cost $8 billion. We are providing $11.3 billion to make sure that all on-costs are covered as well. I think what the Aged Care Royal Commission asked us to do is to look at the sustainability of the system. We are having a good look at that but ultimately this is huge, more than $14 billion all up investment, in aged care to lift the quality of care in this country. Because you and I know, Mark, that is what people voted for at the election.
CHALMERS: And just on the second part of your question, the care economy is more than a pressure on the Budget; it’s an opportunity for our economy more broadly. And we’re proud to make investments, whether it’s the cheaper early childhood education that comes in on the 1st of July, whether it’s this historic pay rise for aged care workers we’re announcing today, whether it’s our efforts to fund the increase in necessary funding for the NDIS. The care economy will become a bigger and bigger part of our economy more broadly. We’re proud to make room where we can to make the sorts of investments that we are making today because it is more than a pressure, it’s an opportunity. Most importantly of all, this is how we align what we want in our economy with what we want for our society. And speaking to Libby and her colleagues before, just the sense of really quite remarkable commitment to the residents here and to their clients and to their friends and to each other, we want to back that in. And that’s an opportunity I think to align the values that underpin the Budget on Tuesday night with what we want to see in communities like this one.
JOURNALIST: Just on the childcare sector, that industry, workers and providers are both calling out for a 10% pay rise, an immediate one, to be able to cope with the increase in demand come July 1. Is that something the Government is contemplating? And would that contribute to inflation in this environment?
CHALMERS: Two parts to that – first of all, one of the main reasons why we reformed the enterprise bargaining system, or the bargaining system, is because for too long industries like childcare, which are made up predominantly of women, have not been getting the sorts of wages outcomes that we want to see. And so Tony Burke’s efforts and Anthony Albanese’s efforts to reform the bargaining system were part of making sure that childcare workers, for example, and other workers, can get better outcomes into the future.
When it comes to the inflationary impact, as I said before, decent wages for working people like Libby and her colleagues, that’s part of the solution when it comes to cost of living pressures, not part of the problem. The advice that we’ve received when it comes to this aged care change, for example, from the Treasury is that the inflationary impact will be negligible. We want to see people get decent wages outcomes.
JOURNALIST: But that would be a pay bump from the Government, though, rather than through bargaining mechanisms, though, is that something?
CHALMERS: Each part of the care economy has different pressures. And in this case, this is the most appropriate way for us to deliver this historic wage increase today. We’ve said previously publicly, a number of ministers have said, when it comes to childcare and other industries, they are a key part of our motivation to fixing a broken bargaining system.
JOURNALIST: I know you’ve said that you’re paying. Can you guarantee that these pay rises won’t cost providers anything. And also, to the minister, are you confident that even with these pay rises there’ll be enough workers to meet demand in the sector?
WELLS: Well, the good news on the second part of your question is that our modelling says that today’s pay rise will bring 10,000 more workers to the sector. So, I’m not kidding when I say this is a seismic shift. We all know that the workforce crisis is the biggest issue facing aged care, and you all have heard me say for nearly a year now that we are going to pull every single lever to address that. Today we are pulling an $11.3 billion lever to lift wages for aged care workers.
JOURNALIST: The first part, can you guarantee that these pay rises won’t cost providers anything?
WELLS: Like I said, StewartBrown estimated that this would cost $8 billion; we’re providing 11.3 over and on top of what it should cost any provider to provide this 15% above the award pay rise. That’s to compensate for things like leave liabilities, like super, you know, on-costs have been accounted for. And like I said, this increase from the daily rate of AN-ACC remember we introduced the AN-ACC funding model in 1 October and we’re seeing how that pans out and it’s a watching brief for us – that rate was increased to $216 on 1 October. Today we’re announcing it goes up to $243.80 per resident per day. That is enormous. That is going from the 1.7% increase that the Morrison Government left the aged care sector with to a 17% increase. That is enormous. So, it will take a while for these things to wash through, but I don’t think by any measure you can say we are not backing in the aged care sector to lift the standard of care in this country.
JOURNALIST: Senator David Pocock has said he’s frustrated with the government negotiations over the Housing Future Fund bill. Will the announcement [indistinct] fund be indexed as [indistinct]?
CHALMERS: We engage respectfully with Senator Pocock and all the members of the crossbench in our efforts to pass what is a really important piece of legislation. When we've got vacancy rates very low and rents higher than we’d like, we need to build more affordable homes and social housing, and that’s what the Housing Australia Future Fund is all about.
We’ll continue to engage with Senator Pocock on the issue that you raised and all of the various issues. I think it beggars belief, frankly, that the Greens and the Liberals and Nationals in the Senate given the pressures on the rental market right now and on a social and affordable housing won’t vote for more social and affordable homes. So, Julie Collins, who’s doing an amazing job as the Housing Minister, who brought together state and territory counterparts yesterday in Canberra to talk about this particular issue, the states and territories are as one. The Labor Government, the Albanese Government, has been very clear – we want to see this Housing Australia Future Fund passed. We’ve already, as I understand it, given a number of concessions to try and satisfy those objectives. Julie Collins will be in ongoing discussions with David and others.
JOURNALIST: NAB has today reported record profits largely driven by the increase to interest rates. How do you think that news will sit with customers?
CHALMERS: We want to see the banks pass on the interest rates to savers as quickly as they pass it on to borrowers. I think that is the main thing that makes people really unhappy in our community - the sense that interest rates hikes get passed on quite quickly to borrowers and sometimes more slowly to savers. If they’re going to pass it on to borrowers quickly, they should pass it on to savers quickly as well.
JOURNALIST: There’s some anger in Sydney today, Treasurer, that there’s money for a stadium in Hobart but that road and rail projects are being axed in Sydney. How do you justify that?
CHALMERS: First of all, we want to make sure we get value for money for the infrastructure program. And Catherine King has committed to the $120 billion infrastructure pipeline which means that there will not be a reduction in infrastructure investment over the course of the next decade on the numbers that we currently have. And I think Australians everywhere have got an interest in us getting much more value for money for our infrastructure investments at a time when costs are blowing out and it’s hard to find workers. We want to make sure that we get it absolutely bang on.
I think the project in Tasmania is a really important one. It goes beyond stadiums; it’s about urban renewal in a really important part of 2 cities. And we want to see that investment flow. We want to make investments in communities right around Australia. We’ll do that in the most responsible way that we can, and that’s what the review is all about.
JOURNALIST: Back on aged care, will you pledge to make the aged care sector more sustainable, including a change to its financial model or are taxpayers just expected to fork out billions of dollars into the future?
CHALMERS: Well, I think the pressures on funding, right across a number of areas, including aged care, are pretty clear. And there will be a piece of ongoing work no doubt as we grapple with some of these ongoing funding pressures. But the priority in the Budget is to fund this historic wage increase for the aged care workers of this country and to bed down some of the other changes that Minister Wells and others have been working on. That’s the priority in the Budget. And you’re seeing some of the fruits of that today.
JOURNALIST: Treasurer, as deserving as aged care workers are, does today’s announcement worsen your structural deficit given that it comes on top of all sorts of other spending too?
CHALMERS: I think the pressures on the Budget are well known and well understood. And the Budget that I hand down on Tuesday needs to grapple with 3 sets of interrelated challenges: first of all, there’ll be cost of living relief provided in the most responsible way, and that means targeted to the most vulnerable people. Secondly, we’ll be responsible and show restraint in a way that helps us clean up the mess in the Budget. And, thirdly, we want to lay the foundations for future growth in areas like cleaner and cheaper energy and the industrial and economic opportunities that flow from that. And so, we will balance all of those objectives. We will weigh up all of those objectives. We’ll take the pressure off the Budget in some areas and there will be additional pressures on the Budget in other areas. And we will make room for important priorities like the one we’re talking about today.
JOURNALIST: Is that a yes, then?
CHALMERS: There are pressures on the Budget. They’re well known. They are well understood, and I’m pleased and proud that the Budget can make room for an investment of this type, which is an investment in the workers of the aged care sector but much more broadly in the care economy as well where so much – so many of our opportunities and so much of our growth will come from into the future.
JOURNALIST: It’s actually a question for Minister Wells: you talked about that forecast 10,000 more workers coming in as a result of this pay rise. Internal Health Department documents said that both the 24/7 nursing requirement and the increasing care minutes would create a shortfall of 25,000 workers in a 2-year period. How do you intend to make up that shortfall further still? And just if we get a bit more clarity on the EBAs? How does that work when there’s a lot of workforces currently negotiating EBAs? We don’t really know what their figures will be. How do you actually take that into account with those Budget constraints?
WELLS: So, with respect to workforce shortages, you’ll know I’ve never taken a backward step from the scale of the problem that we inherited. Workforce shortages are the number one issue in aged care. That being said, that should not mean that older Australians should go without or have a substandard level of care because we can’t get the workers in. I refuse to concede that that’s a standard of care that we should accept. So, we have pushed forward with our recommendations from the Royal Commission which was 24/7 nurses and care minutes, which kick in on 1 October. Like I said before, we are pulling every lever. There are fee free TAFE places, there is clinical and HECS placement and support. As of today, there is an $11.3 billion pay rise. There are also settings in migration that Minister Giles, Minister O’Neil and I have been looking very carefully at. We’ll have more for you on that soon.
We will be required to pull every single lever to deal with workforce shortages in aged care, and I don’t shy away from that. I welcome the challenge because it’s too important for us to fail. So, we will continue to work with everybody on this to make sure that we do get enough workers, not just in aged care but in the broader care economy. Because I think something that should not go by the wayside today is this is righting a wrong where workers in the care economy have been undervalued in this country. And today the Albanese Labor Government says, ‘we value you and we will pay you properly for it.’ And that will have an impact. It will take a while to wash through, but I have every hope that we are turning the corner in aged care, particularly as of today.
CHALMERS: Last one. Make it a good one.
JOURNALIST: Should PwC be allowed to sponsor Budget events if they’re leaking sensitive tax information to customers?
CHALMERS: First of all, I’ve made it really clear my displeasure at PwC and what happened there some time ago when it came to the inappropriate treatment of confidential tax information. We hear a lot for understandable reasons that the private sector wants to be consulted on changes that impact them. In order for that to happen we need to be able to trust the process. And so, I have indicated in the past and happy to repeat again today: we are already taking steps to implement the changes recommended by the Tax Practitioners Board that my predecessor sat on for some reason. We’re implementing those changes. I’ve indicated to the Treasury and to the regulators that if there are more steps that are necessary, I’m prepared to take them.
Those events are organised by the party organisation. I don’t think anyone could conclude anything other than the fact that I have taken a really hard position against this. I consider what happened there to be completely inappropriate. I’ve said that publicly. I’ve said that privately to the company as well. And most importantly of all, I’m already taking steps to try to fix this situation, and if more steps are necessary, I’ll take them too. Thanks very much.