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After Victoria was ravaged by a second wave of Covid-19, Premier Daniel Andrews has targeted his state’s budget to address the crisis’s key drivers: insecure work and aged care. By Rick Morton.

Andrews budget wedges Morrison on aged care

Victorian Premier Daniel Andrews holds a press conference on Tuesday at Thornbury High School in Melbourne about his 2020-21 state budget.
Credit: AAP Image / David Crosling

When Victoria was gripped by a second wave of Covid-19, the acute failures of the public health response soon became clear. As the months stretched on, though, other issues came into focus – from insecure work to the state’s emaciated aged-care system. These systemic weaknesses deepened the crisis.

Never again, says Premier Daniel Andrews.

As Victoria emerges from the catastrophe, during which more than 800 people died, its leaders have signalled they will not wait for the federal government to re-engage with its responsibilities in aged care and industrial relations. The declaration is short and sharp – a combination of incentive and wedge politics – but born of hard-won understanding.

“Insecure work is toxic,” Premier Andrews told reporters on Monday this week, during the announcement of a two-year pilot program that will provide sick leave for workers in precarious employment.

“This one-in-100-year event … has shown us so many of the things we can be proud of: the strength of character, the fact that we are a compassionate state, we look out for each other,” Andrews said. “… But it’s also exposed some things that we just can’t settle for … Insecure work isn’t just bad for those who work under those conditions, it’s bad for all of us.

“And we all pay a price for the fact that so many people, particularly those who work in public-facing jobs, do not have sick leave, do not have sick pay or carers’ pay to fall back on.”

Australia has the third-highest rate of insecure work in the OECD. Even if the definition were confined to casual employment, where people receive a 25 per cent loading in lieu of entitlements, analysis from the Australian Council of Trade Unions (ACTU) shows these workers end up worse off over time. There are 600,000 casual workers in Victoria alone. Many more are employed in the gig economy or deployed from labour-hire firms or on short-term contracts.

Practically, the $5 million earmarked for the design of the sick leave pilot program is small change in the context of Victoria’s first post-Covid-19 budget, which was released on Tuesday. The program won’t be running until late 2021, or early the following year, according to Andrews. It will start with workers in selected industries where the problem of casualisation is most pressing.

But the secretary of the ACTU, Sally McManus, tells The Saturday Paper that the initiative is a “really significant step forward”.

“This year insecure work has literally wrecked the economy and, I hate to say it, but it is true, it has led to people dying,” she says. “I don’t think we can have a more stark example of just what is at stake.”

McManus points the finger at a system that leaves workers with no options.

“It’s a really straightforward human choice: if you’re going to stay home because you’ve got a sniffle, or whether you’re going to pay the bills. It’s pretty simple,” she says.

“Unfortunately, when we’ve had the working groups and these discussions with employers around key issues – and one of them has been around casual work – the employers won’t even admit there’s a problem.”

But the evidence is hard to ignore.

One particularly precarious sector is what Premier Andrews referred to this week as “private aged care”, by which he means the vast majority of nursing homes in Australia, which are funded and regulated by the Commonwealth but delivered by non-profit and for-profit providers.

During Victoria’s second wave, after Covid-19 first slipped out from hotel quarantine, it was these aged-care homes with their contingent of low-paid, poorly trained staff that became one of the most significant vectors for the disease.

Many workers in private aged care are migrants on temporary visas – a category specifically excluded from government support during the pandemic.

There are 612 private and non-profit nursing homes in Victoria with more than 50,000 beds. Almost 2000 Covid-19 cases were recorded among residents in these homes during the second wave, and they accounted for 655 deaths. A further 1294 infections were acquired by aged-care workers in these facilities.

By contrast, in Victoria’s 156 state-run residential aged-care homes, which have more than 5600 beds, there were only three residents who contracted coronavirus and zero deaths. This was an infection rate of 0.1 per cent, compared with more than 6 per cent in the state’s private aged-care network.

There is one key difference between the private aged-care market and Victoria’s state-run homes: only the latter has legislated minimum staffing ratios that govern clinical care of residents.

Victoria’s state budget recognises this disparity. Despite having no regulatory power over the private aged-care sector – it is entirely a matter for the Commonwealth – the state has attempted to force the federal government’s hand on reform.

The Andrews government has set aside $40 million over four years to “support an increase in aged-care student placements for nurses and personal care workers”.

There is, however, one condition levelled by the state. The measure is “subject to the Commonwealth accepting and funding recommendations from the Royal Commission into Aged Care Quality and Safety to introduce minimum mandated staffing ratios in private and not for profit residential aged care facilities”.

Victoria’s state-run facilities have the highest staffing ratios anywhere in the country. According to research released by the aged-care royal commission, public aged-care homes run by the Victorian government, and a handful in other states, are the best performing in the country in 21 of 24 clinical indicators. They are also the best performing in all 14 of the other quality benchmarks, which include resident feedback and workforce conditions.

The royal commission found that, in 2018-19, a total of 119 qualified nursing staff minutes were spent on each resident in each state-run facility every day. This is more than three times what’s spent in the private and non-profit sector, where the Commonwealth requires no minimum staff ratios.

The University of Wollongong’s Professor Kathy Eagar, who directs the Australian Health Services Research Institute and has authored key reports for both the Commonwealth and the royal commission, tells The Saturday Paper that in the case of Victoria’s state-controlled nursing homes, “not one of them had a major Covid-19 outbreak”.

“Even after taking into account differences in size and location, the evidence is very clear. The Victorian government homes are safer than private and non-government aged-care homes,” she says. “One reason is undoubtedly the mandated staffing hours in the public aged-care homes run by the Victorian government.”

Eagar says the Victorian government’s $40 million commitment is an “unprecedented investment” by a state in the clinical competency of private and non-government aged care.

“Presumably the Victorian government has decided that improving the clinical standards in these homes will be better for residents as well as cheaper for Victoria in the longer run,” she says. “Every day, too many aged-care residents end up in the back of an ambulance, in an emergency department or an acute hospital bed for health conditions that could have been managed in aged-care homes if only they had adequate staff numbers and enough staff with the right mix of skills.”

Victoria’s first post-Covid-19 budget will no doubt prompt frustration from the Coalition federal government. Attorney-General Christian Porter has already called the sick leave program a “business- and employment-killing approach”. Any fully fledged scheme would be paid for by a “modest” levy on industry, according to Victoria’s treasurer, Tim Pallas.

Despite these two measures, on aged care and insecure work, some have criticised the Victorian budget for a lack of investment in a third area of concern: health. While the Andrews government has set aside $2.9 billion this financial year as part of its Covid-19 health response – much of it spent containing the virus to now – there is little in the way of forward-looking reform.

The budget contains $2.8 billion in funding to “maintain hospital capacity” over four years; but there is just $50 million after 2020-21 in additional budget allocations for public health. It is an injection of funding to weather the pandemic, without the kind of investment that would allow for structural change to the state’s health system.

The budget papers note, “Funding will support both the cost of meeting additional demands on the health system at the peak of recent increases in case numbers, and ongoing capacity that will be required to enable the safe easing of restrictions and management of any future spread of coronavirus.”

They continue: “This includes additional funding to support frontline healthcare workers, and service responses to help minimise the spread of coronavirus (COVID-19). Support is also provided for increased testing capacity and optimisation of Victoria’s pathology and supply chain processes.”

The other major issue is around contact tracing. There is funding for surge capacity, but no details about necessary structural reforms. The state’s chief health officer, Dr Brett Sutton, told a state parliamentary inquiry that his team has been able to “streamline central teams” with the use of local public health units – a key feature of the successful contact tracing system in New South Wales. But there are limited details of further reform.

While the ordinary economic measures supporting growth in hospital places and reduction in wait times are included, the more difficult work is in overhauling what many in the state consider to be the oversized and unworkable Department of Health and Human Services and historical problems with accountability across service districts.

Health strategist and researcher Daniel Reeders says Premier Andrews still hasn’t learnt all the necessary lessons from this pandemic. For instance, many people in the state’s contact tracing and public health teams are on short-term contracts and some will soon be let go or moved on to other piecemeal contracts.

“I am in touch with people working in the Department of Health and Human Services and it is really clear that the increase in [public health and tracing] capacity was only ever seen as temporary surge capacity,” he tells The Saturday Paper. “A whole bunch of people are about to lose their jobs at the same time as the government is going to do its favourite thing, which is contracting out to local areas to do their own contact tracing.”

Reeders says that some of the key public health issues around unstable employment can’t be solved with sick leave entitlements, although they won’t hurt.

“The challenge is the precarity, it’s not just the lack of entitlements,” he says. “They [workers] are not going to stay home sick if they fear that their employers are not going to employ them or not going to give them shifts after that leave has finished.”

If Australia is to avoid another crisis like Covid-19, there are lessons that must be learnt by the nation as a whole – not merely one state – about the way that unstable employment renders communities particularly vulnerable.

Although change might begin in a few whisper-thin budget measures, it cannot be sustained there. Even so, given the apparent vacuum of federal leadership in both industrial relations and aged care, and especially following the documented contribution of these policy failures to the transmission of a deadly pathogen, it must start somewhere.

McManus says it is “bold” of Victoria to attempt its reforms – and to make some of them contingent on the federal government facing its obligations. While the NSW budget contained similar heavy spending on infrastructure and long-awaited tax reform, the Berejiklian government did not venture out of its traditional realm of responsibility.

“If we now walk away after the pandemic, touch wood we get a vaccine and all that, and we don’t do anything about it, we are absolutely just saying, ‘Listen, we know it’s a big weakness, we know that it is a huge risk on multiple levels, but we’re going to do nothing and ignore it,’ ” McManus says.

“Well, it just means whatever government does do, that is entirely responsible for what might happen in the future.”

This article was first published in the print edition of The Saturday Paper on Nov 28, 2020 as "Budget sets up for post-coronavirus realities".

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Rick Morton is The Saturday Paper’s senior reporter.