The crisis in the caring workforce

Marilyn Harrington and Dr Rhonda Jolly, Social Policy

Key issue
Ongoing workforce shortages are inhibiting Australia’s ability to meet increasing demands for high quality child care and aged care. They also potentially limit the implementation of the National Disability Insurance Scheme.

According to the Australian Bureau of Statistics, there were some 216,300 workers in residential care services in May 2013, mainly in the aged care sector. There were also 356,500 workers in social assistance, most in child care or disability services. Over 80% of these workers were women, and nearly half were employed part-time. These sectors have struggled to attract and retain workers, due to the relatively low pay rates and lack of secure employment opportunities.

In addition, health professionals continue to be in short supply with a range of occupations appearing on the immigration skilled occupations list. Nurses are in particular demand, with Health Workforce Australia (HWA) estimating that there will be a shortage of over 100,000 nurses by 2025.

These shortages of appropriately skilled workers have an impact on several areas of policy priority.

Early childhood education and care

The early childhood education and care (ECEC) sector is critically short of appropriately qualified staff. United Voice, the union which represents ECEC workers, claims that about 180 educators leave the sector each week because of low wages and poor conditions.

The sector also has many not-for-profit providers operating on small profit margins. Implementation of the National Quality Framework for Early Childhood Education and Care (NQF), with its requirements for a higher qualified workforce from 2014 and lower child-to-carer ratios, will exacerbate this situation.

A number of Australian Government initiatives sought to assist ECEC providers. The most recent, the Early Years Quality Fund (EYQF), will provide $300 million over two years to long day care centre (LDCC) providers to offset the costs of employing higher qualified staff. EYQF will supplement wage increases by between $3.00 per hour (for Certificate III qualified staff) to $5.23 per hour, depending on qualifications. The EYQF initiative includes funding to establish a Pay Equity Unit in the Fair Work Commission (FWC).

An application for an Equal Remuneration Order for LDCC employees (educators) has been lodged with the FWC. According to United Voice, the proposed increase will equate to about $10.00 an hour for ECEC educators with a Certificate III qualification.

The FWC application signals that the ECEC workforce is not satisfied with the scope and pace of government assistance. Early Childhood Australia (ECA) notes that the EYQF will apply to less than 40% of ECEC educators (preschools and family day care services are excluded). In ECA’s view, therefore, the EYQF is an inadequate substitute for a broader wage increase for a low paid workforce.

The Coalition’s preference is for the FWC to determine wage increases for the ECEC sector. The EYQF, therefore, will not be extended and the Government has announced a review of its administration. The Productivity Commission, which has already conducted an inquiry into the ECEC workforce, will also be commissioned to conduct an inquiry into the child care system more broadly.

Aged care

In 2010, the then Department of Health and Ageing estimated that the aged care workforce would need to increase between two and three times before 2050 in order to provide care to the growing number of aged care residents. Other challenges include that the aged care workforce itself is ageing, the overall labour market will be more competitive as a result of the ageing of the population and the sector already faces difficulties in attracting and retaining workers.

A Workforce Compact, introduced as part of the 2012–13 Budget, was to provide an employer who met certain conditions, including raising wages to the rate specified, to qualify for access to government-provided workforce supplement payments.

The Government has subsequently dismantled this policy. The former Government considered that the Compact would help retain current workers, who are amongst the lowest paid in Australia, and encourage new growth in the industry, but the Government believed that providers would not sign the Compact, as the funding provided fell short of paying for the wage increase.

While union groups, such as United Voice, welcomed the Compact, providers, such as Aged and Community Services Australia and Catholic Health, agree with the Government’s position.

Disability care

The introduction of the National Disability Insurance Scheme (NDIS) will involve a substantial expansion of the disability services sector, leading to increased demand for disability support workers. In proposing the introduction of the NDIS, the Productivity Commission suggested:

The capacity to provide expanded services will depend on attracting new employees and enabling workers in the system to work longer or more flexible hours if they want to.

The shortage of allied health professionals, particularly in regional areas, also has the capacity to have an impact on the ability to deliver the NDIS.

Health workforce

Advocates of new thinking about the Australian health system have argued that traditional models of patient care cannot cope with the demands of the future. Serious changes have been recommended to tackle problems associated with access and equity, to embed ideas such as prevention and early intervention and to strengthen patient engagement. A number of reports have pointed out that new models of care are unlikely to work if they are underpinned by old models of health professional training. In addition, new models cannot work if existing health workforces are unwilling to adapt, and while various components do not cooperate and collaborate to work more effectively within teams. Finally, health workforce analysis has concluded that realigning workforce structures must be an essential element of a new health workforce model that needs to include new types of workers and revised roles for existing workers.

Health Workforce Australia (HWA) was created by the Council of Australian Governments in 2009 to attempt to deal with these issues. HWA’s research has confirmed that there are many barriers to health workforce change, despite evidence that innovation has the potential to improve health outcomes.

So far, however, HWA has found the task of promoting innovative structural change difficult, and sometimes daunting. Nevertheless, it has the potential to play a significant role in encouraging and coordinating the revision of old – and the emergence of new – workforce roles. This could improve productivity and support more effective, efficient and accessible health service delivery.


Strategies to address the growing shortage of workers in the child care, aged care and disability support sectors are likely to involve either reducing quality standards or increasing costs, if not both.

Addressing the shortages in the professional health occupations is potentially more challenging, as it appears to require a rethinking of the current training and workforce structures and overcoming the entrenched positions of key interest groups.

Further reading

M Harrington, Early Years Quality Fund Special Account Bill 2013, Bills digest, 133, 2012–13, Parliamentary Library, Canberra, 2013.

M Harrington, ‘National quality framework for early childhood education and care’, FlagPost weblog, 19 December 2011.

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