Record profits for aged-care corporates, minimum wage for caregivers

Helen Clark has taken a swipe at corporate operators in the aged-care sector over their "record profits" and minimum pay.

The Prime Minister's pointed comments, at the opening of new apartments for the elderly at the Selwyn Village complex in Auckland, follow the Budget announcement of $126 million over four years for aged care.

Her comments were aimed at corporate investors rather than charitable or religious owners.

"Some corporations are reporting record profits while some workers are on the minimum wage. We need to see more flow-through to the people who are caring," she said.

But an association representing rest home and geriatric hospital owners has taken exception.

"That's a surprising comment," said HealthCare Providers NZ chief executive Martin Taylor, "considering that last Wednesday the district health boards made us an offer of 3.1 per cent for rest homes [funding] and 5.9 per cent for hospitals.

"Inflation for the last 12 months has been 3.3 per cent, so the increase for rest homes is below inflation."

He said the offer also required owners to drop their claims over the flow-on effect of the big pay rise for public hospital nurses, and the impact of the requirement for a minimum four weeks' leave for workers from next April and the increase in the minimum wage. The offer was "tantamount to blackmail".

"The Prime Minister needs to look at where these large groups are making their profits, which is in the retirement village sector, not the aged care sector. We all agree that the retirement village sector, which is essentially property development, is profitable. But she has to remember that provision of care is very different to building a retirement village."

The Budget provided, over four years, $58 million for home-based support services and $68 million for aged-related residential care. This is in addition to $39.5 million previously announced to cover cost and population increases in the wider aged care sector in 2006/07.

Health Minister Pete Hodgson said at the time that as the Government had invested in home-based support services "we have started to see movement in the low wages for workers".