NZ Govt’s 1.2% aged care funding increase not enough, industry says

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NZ aged care providers and peaks have slammed the Ardern Government’s annual aged care funding increase, saying it falls well short of what is needed.

In the yearly Age-Related Residential Care (ARRC) Service Agreement, NZ Health has offered a 1.2% funding increase for the sector. According to Norah Barlow, CEO of Heritage Lifecare (above right, with Prime Minister Jacinda Ardern), she had hoped for more following her meeting with the PM.

“Disappointing to hear afterwards that the ARC funding offer is 1.2%, which falls well short of the 9.4% discussed, and we believe agreed, as necessary by the Ministry of Health, DHBs and NZACA earlier in the year, to address cost pressures.

“We will be strongly opposing this offer and working with our aged care colleagues to ensure our voices are heard,” she said.

Simon Wallace (pictured), Chief Executive of the New Zealand Aged Care Association (NZACA), described the 1.2% offer as “nothing short of a joke”, pointing out that inflation is at 7%, nursing shortfalls have reached 1,100, and more than 800 rest home beds have been lost so far.

“As well as covering operating costs, including managing COVID-19, we have got to give our nurses a pay increase from that 1.2%.

“That 1.2% alone would equate to an increase of just $1,000 a year for the average aged care nurse, a drop in the bucket compared to the $23,000 to $33,000 a year more that District Health Board (DHB) nurses earn,” he said.

Simon, who warned last month of a workforce shortfall similar to Australia’s, accused the NZ Government and Finance Minister Grant Robertson of having a “blind spot” when it comes to aged care.

“Health New Zealand’s offer goes to the heart of a government that neglects the care of older people at a time when our population is ageing, the acuity of people entering care is significantly increasing and we need to be building beds, not losing them.

“It’s time for the Government to front up and clearly signal whether it wants an aged residential care or not, as this 1.2 percent funding increase will not sustain the sector,” he said.