About 80% of aged-care providers are expected to refuse to
sign a 1% funding increase offered by the Government.
The New Zealand Aged Care Association has recommended
providers not sign the contract, which is offered through
district health boards.
Citing increases in KiwiSaver, insurance, the minimum wage
and new technology, the association has called for a 7.6%
increase - an extra $76 million. The offer on the table would
mean $10 million extra for the sector.
Otago-Southland board member Malcolm Hendry estimated about
80% of providers would follow the association's
recommendation. Mr Hendry is chief executive of Birchleigh
Residential Care Centre, in Mosgiel, which would not be
The aged-care sector - which is under pressure from the
living-wage movement to increase wages - was unlikely to
grant pay rises if it had to cope with a 1% increase, he said
- ''it means we're going backwards''.
If providers did not sign the contract, the introduction of
new requirements, such as the computer-based needs
assessments known as InterRai, would stall.
Mr Hendry said Prime Minister John Key suggested in 2012 the
sector would benefit when the Government's books got back in
surplus, but that had not been followed through. Facilities
would need to reduce recreational activities for residents
because of the funding squeeze.
He had hoped the Government would recognise the ''tough
times'' experienced by the sector, in which inflation ran
higher than in other sectors.
Associate Health Minister Jo Goodhew said in a statement the
Government was spending more on health and aged care than
ever before, despite a ''very tight financial situation''.
''I understand that any aged-residential-care providers who
do not to sign the ... contract variation will stay on their
current contract and be paid at existing contract rates,''