A submission on behalf of the peak bodies to the Fair Work Commission looking at a 25% pay rise claim for all aged care workers is seeking clarification from the Federal Government over the funding of on-costs of a wage increase.
“The employer interests invite the Commonwealth to provide its position regarding whether its support extends to funding the associated on-costs of any minimum rate increase,” said the submission on behalf of Aged & Community Services Australia, Leading Age Services Australia and Australian Business Industrial.
The SOURCE reported on August 11 that the Labor government is using the wording “base costs”, which means that providers will have to foot the bill for the on-costs: superannuation, payroll tax, workers compensation, and allowances and entitlements based on a percentage of the standard rate.
Grant Corderoy, Senior Partner at StewartBrown, told The SOURCE that the on-costs will be about 25% – or $1 billion if 25% is awarded – on top of the wage, and includes the super increase, workers compensation, loadings and payroll tax for private operators.
“These are especially relevant considerations given the current financial viability of the sector,” said the submission.
The submission was also scathing of many parts of the government’s submission to the FWC.
“The Commonwealth makes a number of statements on how an increase in wages will promote social inclusion through workforce participation. These are largely speculative statements without evidence to support this position,” the submission said.
The employer groups also argued the government’s reasoning that a wage rise would bring people to the sector was flawed.
“The Commonwealth notes that modelling undertaken by Treasury shows a potential workforce increase of between 5% to 10% after 5 years if minimum rates were to be increased by 25%,” said the submission.
“Given the widespread skills shortages in Australia currently across a number of industries, if this assertion was true, the workers would simply be taken from other industries so the weight in terms of the modern awards objective seems limited. As our submission already states, this notion should not be considered within a work value case.”
The Nursing and Midwifery Federation and the Health Services Union have brought the wage claim to the FWC.
The FWC’s final hearings for the wage claim can be viewed remotely. For more information, click here.
