It’s hard to resist a website that presents itself as brainyquote.com, especially when it allows me to correctly source an aphorism which I carried dear to my heart for 20 years as a public servant. “For every complex question” I used to opine, “there is an answer that is clear, simple and wrong”. I now know that I was channelling, without attribution, the words of the American journalist H.L. Mencken.
Actually I didn’t believe the obvious answers to the wicked problems of public policy were unfailingly incorrect – just that the consequences of ‘solutions’ were often more complex and ambiguous than initially anticipated. Which is a long-winded but apposite lead-in to the Australian Services Union application to Fair Work Australia for an equal remuneration order for the Social, Community, Home Care and Disability Services Industry Award 2010.
The application was lodged last March. The outcome of the case, presently being heard by the Full Bench, will be decided around the middle of the year. My informed guess is that around 150,000 (mainly female) workers in the generally low-paid community sector will be granted an increase in Award rates of 20-50% over a 3-4 year transition period.
Few would deny that the wages paid by not-for-profit (NFP) organisations are generally low. True, some workers, often in larger organisations are paid above-award wages. True, too, that their tax status as charities allows many organisations to supplement their employees’ low salaries through heavy reliance on salary sacrifice of fringe benefits. The fact remains that most community workers are doing a very worthwhile job in difficult circumstances for relatively little monetary reward. They often do it, before they burn out, because they care deeply about the disadvantaged Australians to whom they provide support. In my distant past, as an economist, I called this sense of purpose ‘psychic income’. Unfortunately it doesn’t pay the bills.
The simple view (and my starting position) is that the increasingly professionalised social welfare workforce deserves more adequate recompense and good luck to them. The problem, as Prime Minister Gillard now recognises, is that an entirely justifiable increase – which would strike a blow for gender pay equity – has the potential to have an adverse impact on community employers, the governments who tender out to them the delivery of their human services and those clients who depend upon them.
Here’s the problem. Governments now contract much of their program implementation to community organisations. It makes sense. Outsourcing provides good value-for-money for public funds, not just because of the improved quality of service that mission-driven NFPs deliver but because they are more cost-effective (in large measure because salaries – and the aggregated wage bill – are lower than in either the private or public sectors).
Community employers look like they will find themselves wedged between the ‘rock’ of higher salaries and the ‘hard place’ of inadequately-funded government service agreements. There will be pressures for community organisations to restructure (perhaps altering the balance between volunteers and paid staff) and to ‘work smarter’. There will be renewed calls to rationalise a heterogeneous sector through collaboration, alliance or merger. The truth is that such measures will not be sufficient to offset the scale of the likely Award increase.
The Australian Council of Social Services (ACOSS) argues that community employees should be supplemented by governments for the increased Award rates. The community representatives on Western Australia’s Partnership Forum, which I chair, are actively lobbying for additional financial support. Most NFPs would like to pay their employees higher salaries.
If only things were so simple. The sword of complexity is double-edged. Governments, as the Prime Minister pointed out, are under pressure to be fiscally responsible. How can the Commonwealth, for example, keep real spending increases down to 2 per cent if the cost of contracted service delivery is pushed up by supplementation for increased Award rates? NFPs, on the other hand, face the danger that their competitive advantage may be eroded by increased costs. Some governments, I’ve heard on the grapevine, may be re-examining the financial merits of outsourcing service delivery. Some potential private sector providers are sniffing the breeze of opportunity.
Two things are apparent. First, that the ‘compacts’ that now exist between many governments and the NFP sector will be severely tested, as the consequences of the Fair Work Australia decision are played out in difficult and probably protracted negotiations. Second, that there is a clear and present danger that the adverse social impact of cost-saving may fall on those least able to absorb the consequences – those who are poor, unemployed or live with a disability. That would be wrong.
Editor’s Note:
CSI Panel Discussions: Are community organisations at a crossroad?
This blog will form the basis of discussion for a series of forums CSI is running on the topic ‘Are community organisations at a crossroad?’ There will be expert panellists followed by an audience Q & A session. These discussions will also mark the formal launch of our new CSI blog.
Sydney – March 15
Panellists: David Crosbie – CEO Community Council of Australia, Cassandra Goldie – CEO ACOSS, Toby Hall – CEO Mission Australia, Session chair – Peter Shergold
Perth – March 17
Panellists: Debbie Karasinski – CEO Senses Foundation, Paul Flatau – Director Centre for Social Impact, UWA Business School, Chris Hall – CEO MercyCare and President of WACOSS, Rebecca Brown – Executive Director Premier and Cabinet, Session chair – Cheryl Kernot
Melbourne – March 21
Panellists: Julie Edwards – CEO Jesuit Social Services, David Thompson – CEO Jobs Australia, Paul Smyth – General Manager Research and Policy Centre, Brotherhood of St Laurence, Session chair – Peter Shergold
> For more information or to register click here
You can submit a question for panellists via Twitter @csisocialimpact using the hashtag #csipanel
3 Comments
Mission Australia in its submission to Fair Work Australia has clearly stated its support for fair pay and equal pay for its staff and throughout the sector.
We do not pay at award rates we pay above them and beleive our staff deserve to be as well compensated as they can be for their work.
The facts are the non profit sector do this work better than governments. Federally at least through the compact with the non profit sector the government has a moral commitment to meet the full costs of delivering services. Given the quality of work in this sector why would they not fund it fully.
The Australian Services Union are right to have raised this issue and we support the need for fair pay and equal pay. However the reality we face is there is minimal commitment from the government to meet these costs. This uncertainty should be ended the government should state what it intends to do.
My fear is that the government will back away from its moral commitments however the non profit sector will not back away either from its moral commitments to staff or the legal requirements that this case may bring. But in the absence of government funding the truth is services will close for the homeless, the old, the disadvantaged and this is simply wrong. Neither I nor my staff would want that.
It is time for the governments of Australia to meet their moral obligations not just to the staff of the non profit sector but also to the disadvantaged who may miss out. It is time for them to commit to meet the costs of fair pay in this sector and to stop this terrible situation where many are left in limbo.
My first foray into IR in the community sector revolved around the then historic High Court case in 1983 – the CYSS or Social Welfare Union case – which resulted in the making of the first federal industrial award in the community services sector in 1985 and opened the way for the first time for the making of federal awards in other sectors such as teaching, nursing, firefighting and many others.
When the Community Youth Support Scheme Federal Award was made and when subsequent Federal Social and Community Services Awards were being made there was a great deal of commentary about how the sky would fall in about how it would be impossible to pay fair wages and provide decent conditions. Some employers in the sector were outraged at the prospect that they might be legally obliged to provide toilets for their staff. In the end and after a great deal of protracted and difficult negotiation and implementation, fairer wages and conditions were provided and the sky didn’t actually fall in. Governments came some considerable way to the party, organisations adjusted their services and staffing and found other sources of revenue.
Jobs Australia today provides employer-side IR/HR services to a total of more than 1000 organisations in the broader social and community services sector and is closely involved in the pay equity case as a major sector employers’ organisation.
For reasons of justice and equity and equally compelling reasons of sustainability (and the imperative that the community services sector must be able to retain and attract the workers who are its mainstay) – there must be significant pay rises for many of its workers and especially those at the front-line of service delivery and support. One of the sector’s problems of its own making (in part at least) in this regard is that services funded by governments have been under-priced and that funds that have been accepted to deliver them have historically been too low. The pay equity case also brings those chooks home to roost as well.
The quantum of those increases and the way they are phased in and applied will present some complex and difficult challenges for government funders, for agencies themselves and their peaks and for the unions and employer organisations involved.
Without knowing the outcomes, it is difficult to imagine how any government could agree to anything much more than in-principle commitment to come to the party when increases are being implemented. Governments don’t tend to write blank cheques and especially not when times are fiscally tight. When a decision is made by the Commission, and implementation issues have been ironed out – then will come the time to test the mettle and the veracity of the government commitments that have been made to date – and to test the mettle of the sector to act in a cohesive and united way when the rubber really hits the road.
We need also to address some other important issues which include how to fund increases for services which agencies raise their own funds and how to address income increases which agencies need to meet pay costs in services which are supported by but not fully funded by governments as opposed to those government services which must be fully funded by the governments on whose behalf they are delivered.
As for the issue of reducing competitiveness of the sector vis a vis the private sector, I think we need to believe in back our ability to be able to deliver more decent, effective and efficient services than is possible when returns must be delivered to shareholders.
The sector is at a crossroads on this issue and while it’s not going to be easy, I don’t think the sky is about to fall.
I tend to agree with David in that the fight for fair wages and conditions for nurses and other essential services workers are always met with threats of loss of services to the public and financial ruination but somehow the system never quite seems to collapse as predicted.
I want to make two brief pot-stirring points:
1. Not-for-profits who conduct businesses (i.e. undertake contracted work) need to act like businesses, including having the ability to rationally cost and negotiate fair prices for their services and to vacate the field if theycan’t get a fair price, especially for their workers. Be in no doubt that if government and/or private businesses move into the space they will get the price they need from the taxpayer.
2. The level of waste in the not-for-profit sector from myriad organisations occupying the same space and absorbing scare resources unnecessarily has to be confronted some time and now’s as good a time as any. ( I could name the worst offenders within the sector but I value my health.) If wage justice hastens rationalisation, bring it on.