Pay Parity Claims and Privatisation Agendas in Disability Serivce World

In early November workers from the community and social services sector in Victoria won the right to have a pay parity case heard by the federal industrial arbitrator, Fair Work Australia. If they are as successful as their Queensland counter parts, who achieved an increase of around 37% with a similar claim, this will result in a huge bill for a sector that is already described as underfunded and crisis-driven.

The crux of the case that is being put to the tribunal is that a pay rise is necessary in order to gain wage parity between community workers in the non-government sector and their government counter-parts. Claims, such as those from Australian Sex Discrimination Commissioner Elizabeth Broderick, that this is a gender issue are only partly true. If successful the claim will work towards gender equality in pay only insofar as it results in a pay increase for a sector with a predominately female workforce. The case itself is only looking at differences in pay arising between people doing comparable work under different awards.
According to data collected by the Australia Services Union the wage difference between government and non-government positions is, on average, between $10,000 and $15,000. It is this that forms the crux of the workers case and as the Queensland result demonstrated, it is a good one.

In this claim the employers of the workers offer some support, although funding the increase is a concern for them. When offering his support for the claim John Falzon, National Council Chief Executive of St Vincent de Paul Society added:

“It is up to all of us in the community sector to ensure that this translates into appropriate government funding measures so that workers are valued in their daily work with people who are pushed to the margins of society.”

Such concern is matched by the ASU. On Tuesday the 11th they marched outside the Victorian State parliament and treasury buildings demanding the Brumby government ensure that their potential pay increases are funded.

For employers in the sector the disparity is also a source of continuing workforce retention and recruitment problems.

Given the support for the claim from many quarters it looks as though it will be successful. For the Victorian government, funder of most of these organisations, this is likely to be a problem, as the ASU’s protest sought to demonstrate.

In fact, due to the push for Award Modernisation that would see all such employees similarly treated, this is a significant financial problem faced by all states. In Queensland the decision resulted in a $414 million increase in funding. Hence, Julia Gillard has said the federal government will have a role in at least negotiating the bank rolling of the necessary funds.

The problem can be understood as a kind of karmic retribution. Governments have taken advantage of the fact that charitable institutions have gotten away with paying their employees less than comparable rates. Rather than pay people under more generous public sector award rates governments had utilised this efficiency of the private sector in providing the welfare services people had demanded.
The disappearance of this advantage could have huge ramifications for the sector. These cost increases are occurring in the context of claims that the sector is already under funded and that in some cases service levels are too low.

Problems are particularly acute in the care of people with a disability. This is regularly identified in the news media and was acknowledged in a recent government sponsored report into disability issues. The report, Shut Out: The Experience of People with Disabilities and their Families in Australia, found the following about current services:

“The disability service system was characterised as irretrievably broken and broke, chronically under-funded and under-resourced, crisis driven, struggling against a vast tide of unmet need.”

This report is a step in the federal government’s plan to develop a National Disability Strategy to respond to these growing issues of the sector.

At present momentum within the sector suggests two central reforms. Firstly, the introduction of a special tax or levy to fund disability services; and secondly, moves towards greater privatisation of the disability sector. Although sketchy at present, these ideas are being pushed, without significant opposition, from major industry figures.
Disability service and advocacy organisations have banded to gather in order to lobby the federal government to introduce the special levy, dubbed a National Disability Insurance Scheme (NDIS), to fund disability services. At present desired service levels are vague, some are listed but it is only suggested that these are to be “fully or partially funded.” The call for the levy, however, is loud and clear.

The call for greater involvement of the private sector in the provision of disability support is less pronounced, but nonetheless evident. It was one of the central points of the submission by Yooralla, a key proponent organisation of the NDIS, to the productivity commission’s investigation into the contribution of the Not for Profit Sector. Yooralla’s significant role in the push for an NDIS and its twining of these demands suggest that it may be part and parcel with the funding desires of industry figures.

Whilst government is losing the motivation in pay disparity to increase contracting its support services to private operators there are still many other benefits to the provision of services through private operators that mean that this remains an attractive option.

Most important of these is that having welfare duties contracted out to
private service providers means governments can evade responsibility for the provision of services in a number of ways. Problems can be attributed to rogue operators, general responsibility can be shifted to others and where users have greater control of spending they themselves can be blamed for poor choices. But further, having services provided by organisations, such as charities, means rights can be reconceived as privileges.

Last week the Disability Investment Group released a report into ways the sector could be better funded that recommended a feasibility study into the National Disability Insurance Scheme. Given that key members of this committee are proponents of the scheme this is hardly surprising, just how far that commitment runs in the sector will be something to be judged, if at all, as these proposal becomes more concrete.

Whilst the idea of greater funding would seem to be something that would hardly be challenged by many in the sector the question of privatisation is always fraught. That it is not being questioned is perhaps the sign of political dominance by leading figures, such as Bruce Bonyhandy head of Yooralla and member of the Disability Investment Group, or of an unusual consensus about the desirability of privatised disability care.

The removal of pay disparity between government and non-government community and social service workers will remove a significant incentive for the provision of services via these organisations. Nevertheless, in the case of disability services at least, the cost of this increase and the problems faced by the sector mean that not only is it likely that funding to private organisation will be increased but also that there is a good chance that there will be greater privatisation. Of course, as with everything, there is a chance that no significant reform occurs at all.


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One Response to Pay Parity Claims and Privatisation Agendas in Disability Serivce World

  1. Pingback: Sex, Lies and Pay Parity « Barking Coins

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