Look after workers who look after our parents

At one time New Zealand took pride in its many international firsts in looking after the most vulnerable in our community.

This pride traces back to the 1891 Liberal government led by John Balance which gained power following the 1880’s depression.

One of the firsts from that era was the introduction of a means tested old age pension in 1898. It was 6s 11p per week or ₤18 per year for men over 65 and women over 60 who didn’t earn more than ₤1 per week. In 1905 it was increased to 10/- per week and in 1911 extended to widows with children.

The next improvements came in 1935 with the election of the first Labour government – also after years of depression. Care for the vulnerable was consolidated and strengthened with no government, National or Labour, for 50 years daring to interfere. It was part of what made us kiwis.

The pride we felt was the same sort that went with Hillary on Everest or Snell at the Olympics. It became part of our cultural wallpaper. We were a small country doing big things and somewhere deep in our collective soul was a gut feeling of support for the underdog – to make sure everyone got a “fair go”.

This was all ripped apart with the election of the baby-boomer generation to political power in 1984 via the Lange-led Labour government and the scene was set for private sector takeover of aged care.

In 2006, for our elderly citizens who need rest home care, the 6/11 per week of 1898 has become $650 per week in a government subsidy.

Traditionally it was church groups and non-profit community trusts who provided high quality care for our elderly.

However these groups have been abandoning this role because government funding is not enough to pay decent wages to staff and maintain a high quality of care.   Earlier this year I was talking with a director of one such church-based trust who said their trust would be out of the aged care area within two years because they were not prepared to pay poverty wages to staff or reduce the quality of care they provided. Their group was losing money and would sell their rest home facilities rather than make ethically reprehensible decisions.

As they leave, the private sector is moving in via large Australian companies with deep pockets and hungry for profits. These businesses run elderly care with 15% less staff on average and hold wages down. Where the churches can’t make ends meet these private companies are making handsome profits.

It is predicted that the current 35,000 rest home beds will be owned by just a dozen companies in 5 years time.

A spokesperson for Macquarrie, which owns Metlife and Eldercare in NZ, said last year that  “We are attracted to the sector because of its stable revenues and predictable cash flows”. By this they mean the government subsidy provides regular, reliable income and generates stable, predictable profits.

One of the finalists in the 2005 Roger Awards for the worst multinational corporation operating in New Zealand was Guardian Healthcare which runs a network of rest homes around NZ. It has been bought and sold twice in the past couple of years with hundreds of millions made in capital gains and a predicted profit of $26 million this year.

Last year Guardian offered its staff a miserly 2% pay rise. Many experienced staff receive the adult minimum wage ($10.25) and even after 23 years service one worker was receiving just $11.36 an hour.


We have no right to be surprised at the problems now surfacing in these privately run rest homes. The revelation last week of appalling practices at the Culverden Group resthome/hospital in Mangere, which faces closure after Ministry of Health inspections, is just the tip of an ugly iceberg.

The quality of care is being squeezed out. Successive governments have held down their subsidy to drive out the churches and save money by casting the elderly to the wolves.

From the catalogue of failings at Culverden perhaps the most chilling was the inspection which found “A second patient was noted to be in pain due to her arthritis but her medication had been discontinued upon entry to Culverden with reference to cost”.

For heaven’s sake, this is somebody’s mother living in a land of plenty where the government boasts a $6.5 billion budget surplus.

All this should be a big worry to the baby-boomers who created this system just in time to retire into it. 

The answer is not for the government to simply increase the subsidy because that just feeds the corporate habit. It’s like giving drugs to a junkie. Instead, funding increases should go to care provided by churches or non-profit community trusts with the phasing out of subsidies for the private sector.

Now there would be a real source of pride for our children and grandchildren.