Health Minister: “we won’t be able to afford everything straight away”

Minister of Health David Clark has conceded on Q&A that there is not enough money available to pay for all Labour’s election promises, like reduced doctors fees and pay equity for nurses. He blames it on the competing demands of other parties in Government, and ‘underfunding’ by the last Government – Health is always underfunded in that it is never possible to afford all the needs and demands.

Corin Dann: It’s interesting talking to people in the health sector this week. One in the nursing sector said to me they voted National because even though they were sympathetic to many of the things you’re doing, because they didn’t believe you would have enough money left after making all your promises for the nurses, for their pay settlement. And that’s the reality, isn’t it? The nurses aren’t going to be able to get what they want because you’ve got so many other things to pay for.

David Clark: We’ve set aside money across health. We’ve said that we want to spend more money, and we did say we wanted to spend more money than our opponents. But we won’t be able to afford everything straight away. Nobody pretends we can. We won’t be able to afford everything in our first Budget. We’ve got to do it step by step. And there is a backlog of underfunding. We’re going to take steps to address that.
Corin Dann: You went into the election campaign making it clear you would deliver all this money and you would deliver all these promises.

David Clark: We will deliver the promises we make.

Corin Dann: In the first term?

David Clark: In the first term.

Corin Dann: All of them?

David Clark: Corin, all of them, subject to any new information that comes to hand.

The ‘new information that has come to hand’ since Clark became Minister is that the Government has already committed a large amount to things like the benefit increases, fee-free tertiary education and the Provincial Development Fund, and there isn’t going to be enough available for everything promised for Health.

Corin Dann: So new hospitals, what about—Let’s just stay back on the nurses’ pay very quickly. Because the issue here seems to be pay equity, isn’t it? That’s the big problem you’ve got looming. Are nurses going to get pay equity this term?

David Clark: Pay equity is further down. It was in the negotiated offer that went forward previously, pay equity – a shift towards that. It is huge. Let’s not pretend it’s not. It’s a serious issue, but it does need to be tackled.

Corin Dann: But why shouldn’t they get pay equity when other parts of the health sector are and we’re hearing stories of nurses who feel like they’re earning less than caregivers when they’re 20 years experienced or whatever. Why shouldn’t they be getting pay equity now?

David Clark: Well, they should be getting pay equity, but there is a process to work through to work out how we do that.

Corin Dann: It’s money, isn’t it? Because according to the advice given to the Labour Party during the coalition negotiations, the estimated cost from collective bargaining and pay equity, if you join them together, for the health sector over three years is $750 million. You don’t have it, do you?

David Clark: Yeah, these are big sums. Of course we have the money. We have budgeted really carefully. Labour Governments and coalitions with Labour in them are held to a higher standard. We know that.

I’ve heard this claimed before, as far as I know it is subjective and unsubstantiated, and I call bollocks on it.

David Clark: And that’s why we did our sums very carefully when we were in opposition, and the promises that have been made in the coalition agreements and the confidence and supply agreements will be kept. We have accounted for them and we will deliver on them.

But when?

Corin Dann: Let’s look at primary healthcare. Is that going to be the big focus for you in many ways? Because that’s what’s going to make the big cost savings, isn’t it?

David Clark: Absolutely. Longer-term, it will. In the short term, we’ve got so much unmet need. Last year over 500,000 New Zealanders couldn’t afford to go to their GP. One in four adults in New Zealand now cannot afford to go to their GP in any given year for reasons of cost.

Corin Dann: So will we see in the Budget you deliver on your promises to bring GPs visit down by, what, $10 on average? From $40 to $30?

David Clark: We’re going to have to phase some of these initiatives. There’s no doubt about that. I’m not going to skate around that, and I’m not going to make the Budget announcement today, you understand that, Corin.

Corin Dann: But you are signalling that that’s not coming all at once?

David Clark: We will make healthcare more affordable, and that includes primary care.

Corin Dann: So when can someone expect to see the average get down to 30? 

David Clark: Corin, I can’t announce that today. We are phasing our priorities, but we are absolutely committed to the principle of making sure New Zealanders can afford to visit their GP.

So a policy promise has become a principle that may be phased in at some time, perhaps.

Corin Dann: And you’ve got a national cancer agency you’ve got to do?

David Clark: Yep, we’ve got lots of things we’ve announced– 

Corin Dann: Will we see that this term?

David Clark: We will see some progress in that regard. I’m having policy work done now to tell me what the best way is of delivering those things. We’re in government now, and that’s different. I do have access to a lot of researches, to the best international evidence, and I want to make sure that every dollar I spend goes as far as it can possibly go as Minister of Health and of course as Associate Minister of Finance.

Being in Government is different to being in an election campaign, and being Minister of Health is different to being Opposition spokesperson on Health. You don’t need the best international evidence to know that it is very difficult to meet all the demands of the Health portfolio.

There will never be enough money to afford everything that is wanted, especially with substantial spending commitments for other things like education, social welfare, housing, transport etc etc.

Clark has since confirmed that the Government won’t be able to meet all their promises ‘straight away’.

NZ Herald: Health Minister David Clark says coalition funding pressures have delayed cheaper doctors’ visits for all

Labour’s promise to cut the cost of going to the doctor by $10 from July 1 this year will now have to be phased in over time, Health Minister David Clark has said.

He points to Labour having had to meet the cost of new priorities from agreements with the New Zealand First and Green parties, Labour’s partners in Government, as the reason the full policy cannot be implemented from July 1 as promised.

Clark’s admission is the first time a minister has conceded that an election promise may have to be delayed.

Labour promised that from July 1 this year, the cap on doctor’s visits for very low-cost access practices would be lowered from $12 to $2 for those aged 13 to 17, and from $18 to $8 for patients age 18 and over (it is already free for 0 to 12 year olds).

For visits to other GPs it promised, from July 1, to reduce the average cost from $30 to $20 for teenagers and from $42 to $32 for adults, and to cap the maximum fee at $59 from $69.

The policy was estimated to cost $213 million a year.

Clark made it clear today the policy will now have to be phased in but has given no hint as to how.

“I am pursuing the principle that we get more affordable access to primary care in this country,” he told the Herald. “And what happens when you form a coalition Government is that you agree priorities and we are responding to the priorities as they are outlined in the confidence and supply and coalition agreements.

“I am pursuing cheaper doctors’ visit but I am signalling that that will be phased over time.”

Perhaps there will be a clearer signal of what sort of phasing in over what time in the budget.

I don’t recall Clark or Jacinda Ardern or Grant Robertson saying “we won’t be able to afford everything straight away” during the campaign. A lot of criticisms were directed at Steven Joyce when he pointed out a large difference between spending promises and available funds – the infamous fiscal hole.

Health can be a particularly emotive issue on a personal level, people’s health and lives are at stake.

We know a perfect ‘fully funded’ health system is impossible, but what we should expect from our politicians and our Government is honesty that not everything can be delivered due to competing demands.

Genter talk with school pupils “inspiring and positive”

Many of us will have seen media reports of speeches or events we have witnessed, or interviews we have taken part in, differ from our own impressions.

Here is one example:

The Stuff item (22 March):  Minister for Women says old white men should ‘move on’ from company boards

Women’s Minister Julie Anne Genter says old white men need to “move on” from company boards to help close the gender pay gap.

Speaking to students at Christchurch’s Cobham Intermediate School on Thursday, Genter said the private sector needed to address the low level of female representation on New Zealand company boards if more businesses were to be led by women.

About 85 per cent of board members were male, and many were “old white men in their 60s”.

That part of Genter’s talk is unlikely to have been of much interest to a 12 year old girl.

Genter went to Cobham to visit 10-year-old Maia Devereaux, who sent the minister a pay equity petition after a class project on what a utopian society might look like.

I can understand a 12 year old being peeved about being referred to as 10 years old.

Maia said it was hard for her 40-odd signatories to refuse when the gender pay gap was presented to them on paper.

“I didn’t really have people who said no but I think there are people out there who would.”

I think that most people would agree with the principle of pay equity.

Pay equity commitments

Jacinda Ardern speaking at a pay equity rally today, where amounts other things she committed to pay equity for mental health workers – that won’t be cheap so must be factored in to Labour’s spending promises, but I think it is just. and needs to be done urgently.

Pay equity to be a priority for Labour

Labour will make sure that the country’s mental health workers are a priority when it comes to pay equity negotiations, says the Leader of the Opposition Jacinda Ardern.

“It is very important for me to right the wrong created by National’s exclusion of mental health care workers in the TerraNova equal pay settlement

“We all want a just agreement that will stop the potential exodus of talented carers. It’s in everyone’s interests to ensure that these important workers are paid fairly, and that they continue their vital work.

“A settlement has become crucial for the country’s health as in the past nine years there has been a 60 per cent increase in Kiwis with mental health problems trying to access help through District Health Boards and other agencies.

“I want these mental health and addiction support workers left out of the pay equity deal to know that Labour will not let them down.

“The Pay Equity legislation the Government introduced this week will also be scrapped and redrafted when we are in office. The current legislation means we will never again see a settlement like the TerraNova settlement, or genuine pay equity achieved for our sisters, mothers, daughters and granddaughters. That’s just not right in 2017.

“Labour pledges that his will be a priority for us. This injustice must be righted,” says Jacinda Ardern.

Greens: Women who work for Govt to be paid fairly by 2020

The Green Party has announced today that it will make public sector chief executives responsible for achieving pay equity for employees of core Government departments within its first term in Government.

The Green Party will make gender pay balance a performance expectation for each chief executive across the core state sector. Green Party MP Jan Logie announced the move at a Pay Equity Coalition rally in Auckland today.

“Women have been underpaid and undervalued for too long. The Green Party will ensure that women who work for the Government are fairly paid by 2020,” said Green Party women’s spokesperson Jan Logie.

“The Government should be leading the way towards pay equity. It is a major employer so this will have a huge positive impact on the lives of women.

“At the moment, the Crown Law Office pays men 33 percent more than women. The State Services Commission pays men 22 percent more than women. Responsibility needs to be within each government ministry. Specifically, chief executives need to take action to address this unfairness.

“There has been a calculated decision to pay some people less than others, and women deserve to be paid more than they currently get.

“The wider public sector and private sector organisations with Government contracts will be required to report on their gender pay outcomes, advertise all starting salary bands and achieve gender pay balance by 2025 as a condition of their contracts.

“Chief Executives will be expected, with unions, to identify female-dominated jobs across the public sector. They will then need to do a proactive assessment for the skills, responsibility, experience, and work conditions of that job, and pay women what they would be paid if it was a similar male-dominated role.

“We have talked with experts and unions and we believe this timeframe is achievable.

“It’s time for a bold government move on pay equity, and the Green Party in government will make that happen,” Ms Logie said.


Editorials on pay equity

Editorial response to the announcement of an agreement by the Government to substantially increase pay rates for health care workers after a pay equity case that began in 2012 – see Pay equity for health care workers.

ODT: A giant step for womankind

The undervalued work of a group of (predominantly) New Zealand women is about to be rewarded with a substantial and long-overdue pay check. It is likely to be the first of several.

The settlement is the result of caregiver Kristine Bartlett’s 2013 case to the Employment Court (it also went to the Court of Appeal and Supreme Court), which found her low hourly pay rate (then $14.32) was a result of gender discrimination under the Equal Pay Act. It reinterpreted the Act as applying to equal pay for work of equal value, not just the same pay for the same work.

Seeing the inevitable snowball effect, and wanting to keep future claims out of court, the Government set up a joint working group comprising government, business and trade union leaders to develop universally applicable pay equity principles (which, once legislation has been passed, will provide the framework for future claims).

More money to women means more money to families and children (and it is likely to be money spent locally). It also means women have more chance to put money towards vital retirement savings and the like. Surely everybody wins?

The message the settlement sends about value (of women, their work and those they look after) reaches far beyond the pay packet. In the changing world of work private businesses will simply have to adapt – especially if their workers now have other options.

Although forced to act, the Government has again stolen the traditional social policy ground of Labour. Its announcement mere months away from the general election may help it cash in on its investment.

Whatever that result, the settlement remains a giant step towards giving some low-paid New Zealand women (and men) the dignity, respect and financial reward they deserve.

NZ Herald: Pay equity’ deal could lift all low incomes

Nobody will begrudge residential carers the big pay increase agreed yesterday between their union, employers and the Government. The carers, predominantly women, provide services to the elderly and disabled that are not always pleasant but need to be performed with patience, compassion, professionalism and a good deal of common sense.

It may be the first time a wage increase has been won on a gender equity argument and the Council of Trade Unions hopes it will be the first of many, in the private sector as well as the public service.

Now that the argument has been accepted for residential carers it will be interesting too how widely it is applied. School support staff are staking their claim next. They, too, are paid from the public purse. It may be much harder to convince industries in the private sector that they should pay more than they need to where women are concerned.

But the scale of the increase awarded to residential carers, even if goes no further than state paid or subsidised services, will be felt across the economy. Private sector employers may have to offer more than the minimum wage to keep female staff who could otherwise find work in rest homes and the like. If the decision starts to lift all low incomes, it will do a great deal of good.

The Press: Aged care settlement an important pay equity milestone

Speaking to RNZ, tax expert and Labour candidate Deborah Russell expected that a flow on effect would lead to pay rises in equivalent private sector work. There has been predictable consternation about the costs to business, so it was pleasing to see that Auckland Chamber of Commerce chief executive Michael Barnett welcomed the pay equity settlement, saying that “the many businesses that do not have a gender pay gap have no reason to be alarmed”.

Other sectors may soon follow. Teacher aides have began mediation talks with the Ministry of Education after a 10 year battle.

In a broader sense, the settlement is about more than whether women are paid the same as men. Some of the workers who benefit from the settlement are paid just $15.75, the statutory minimum wage, despite years of experience. It is about whether New Zealanders are paid enough, full stop.

The settlement does not solve all issues that could be said to fall under the umbrella of pay equity and access to work. There are still barriers to working parents and more attention must be paid to making childcare affordable and easily accessible. Workplaces must become more family-friendly for both men and women.


Pay equity for health care workers

A major win for Kristine Bartlett, her union and 55,000 health care workers after the Government has agreed to a major boost in pay rates.

$2 billion pay equity settlement for 55,000 health care workers

Health Minister Jonathan Coleman has today announced that some of the health sector’s lowest paid workers will share in a $2 billion pay equity settlement over five years.

The wage boost follows the TerraNova pay equity claim brought by E tū (previously the Service and Food Workers Union) on behalf of care worker Kristine Bartlett.

“This settlement recognises the work carried out by the 55,000 workers in our aged and disability residential care, and home and community support services across the country,” says Dr Coleman.

“From July 1 this dedicated and predominantly female workforce who are mostly on or around minimum wage will receive a pay rise between around 15 and 50 per cent depending on their qualifications and or experience.

“For the 20,000 workers currently on the minimum wage of $15.75 per hour, it means on July 1 they will move to at least $19 per hour, a 21 per cent pay rise. For a full-time worker, this means they will be taking home around an extra $100 a week, which is over $5,000 a year.”

For these 55,000 workers this funding boost will see wages increase to between $19 to $27 per hour over five years. Existing workers will be transitioned to positions on the new pay scale which reflect their skills, and their experience. For new workers employed after July 1 wages will be based on an individual’s level of qualifications.

A care and support worker on the minimum wage with three years’ experience and no qualifications will receive a 27 per cent increase in their hourly wage rate moving from $15.75 to $20 per hour from July 1. That rate would progressively increase to $23 by July 2021 and would rise further if they attain a higher qualification.

The $2.048 billion settlement over five years will be funded through an increase of $1.856 billion to Vote Health and $192 million to ACC.  ACC levies are set for the coming years, but may possibly increase over the next decade to support this. However, that is not definite. There may also be an increase in costs for people in aged residential care facilities, whose assets keep them above the subsidy threshold. This will be determined through the annual Aged Residential Care contract negotiations.

“To ensure the pay rises happen in the agreed manner, I will be introducing legislation to Parliament shortly,” says Dr Coleman.

“I would like to thank E tū, Public Service Association, New Zealand Nurses Organisation, and the Council of Trade Unions for their constructive and positive approach throughout the negotiations. I would also like to acknowledge the New Zealand Aged Care Association, Home and Community Health Association, and the New Zealand Disability Support Network for the vital role they have played in reaching this agreement over the past 20 months.

“I would also like to recognise the employers who will implement this new wage structure and pass the rates onto their staff.

“Home and community support, disability and aged residential care workers are widely seen as amongst the most deserving of recognition as a pay equity case. It is an historic moment for the Government to address this undervaluing with Ms Bartlett and the unions.”

Some background from RNZ: Govt settles historic pay equity case

In 2013, Kristine Bartlett – a professional caregiver – successfully argued in the Employment Court her low hourly pay rate was a result of gender discrimination under the Equal Pay Act.

Health care workers, including age care and disabled  care workers, were grossly underpaid through the Government for doing demanding jobs largely done by female workers, so this is a big step up towards pay equity.

Not only will this pay health care workers what they deserve, it will also boost the incomes of a lot of low waged households and families.



Gender pay equity

Pay equity for women is being promoted through the courts with two new cases coming up recently.

Women have struggled for a long time to achieve pay parity with men. It’s easier in occupations that have a split of male and female employees, although women in general are still disadvantaged in career paths if the take time out to have children.

The latest cases are in occupations dominated by women – midwives and education support workers. While there may be valid arguments that these occupations are underpaid it gets tricky when trying to compare them to other male dominated occupations.

It’s worth nothing that both midwives and education support workers are relatively new occupations. The work of midwives used to be done by GPs and support workers are recent additions to the workforce too.

An ODT editorial Mind the pay gap looks at the comparisons being made. They illustrate the overall problem:

Figures from Statistics NZ, the State Services Commission and others show on average women are paid $4 an hour less than men – which equates to a gap of about 14% of the average wage.

There are variious reasons for that pay gap.

Midwives’ take home annual pay ($100,000) is high but after expenses (including travel and equipment) amounts to less than $54,000. They are on call 24/7.

They argue they have taken over the role once done by GPs and their claim likens midwives to mechanical engineers. (The Government’s careers website states trainee GPs usually earn $70,000-$175,000 and experienced GPs $113,000-$212,000, while graduate mechanical engineers earn $55,000-$65,000 and experienced ones up to $115,000 a year.)

A major difference between midwives and mechanical engineers is that midwives are state funded and are on a flat pay scale – probably at their insistence. Mechanical engineers will be able to shop around for better paying jobs in the private sector.

It seems odd to choose a single occupation comparison, especially when there are significant differences between them.

The NZEI argues its education support workers are on a par with prison officers in terms of skills, responsibilities and demands, but pay rates are an average of $10 an hour less.

This is a comparison I have major doubts about. Education support workers deal with kids – sure some of them can be problem kids and I’m sure it can be challenging work at times. But to equate teaching kids with being a prison officer seems an odd comparison to me.

Teachers may be more on a par with prison officers. Are there prison support workers who supplement the work of prison officers?

Not only is it difficult to come up with fair comparisons, if they succeed in making a case for substantially higher pay it will have major flow on implications.

If the education support workers manage to convince the Government ot pay then another $10 per hour will teachers be happy to have subordinate workers now getting similar levels of pay to them? I doubt it.

Gender pay equity in theory is something that should be aspired towards. Achieving it in practice without triggering snowballing rate rise claims will be quite a challenge.