The NSWNMA asked Deloitte Financial Advisory to calculate and compare the costs and financial rewards of a 15 per cent wage increase and rolling out agreed staffing ratios.

The Association has handed the NSW Government a business case for a 15 per cent  wage  increase  for nurses and midwives and safer hospital staffing.

Our proposal to the NSW Treasury department shows the government where it can find the money to pay for these and other improvements.

The improvements will attract more nurses and midwives back to NSW Health and make NSW public hospitals competitive with other states in the job market, the proposal said.

Costings for the business case – including revenue opportunities, cost savings and benefits – were calculated by Deloitte Financial Advisory for the NSWNMA.

The business case put forward three major initiatives:

1. Finish implementing ratios across agreed clinical areas – to cost about $204.4 million.
2. Pay a 15 per cent wage increase – to cost about $863 million.
3. Make assistant in nursing (AIN) positions supernumerary – to cost about $130 million.

The state government can fund the three initiatives by accessing “system-wide funding opportunities” identified in the business case.

They include “technical efficiency” measures, which aim to secure additional funding from the Commonwealth without increasing patient activity.

UNCLAIMED COMMONWEALTH FUNDING

NSW public hospitals have left billions of dollars of Commonwealth funding on the table by not undertaking these technical efficiency measures, the business case argued.

It said the state’s “cumulative forgone Commonwealth funding contribution” amounted to about $3.28 billion between FY19 and FY23.

The report also proposed “allocative efficiency” measures that involve reallocating patients to more appropriate parts of the healthcare system.

ECONOMIC SAVINGS FROM RATIOS

The business case calculated the economic value of finishing the rollout of ratios in agreed areas, a 15 per cent pay rise and making AINs supernumerary.

Benefits include:

• avoided cost of staff turnover
• improved Commonwealth revenue due to reduced hospital-acquired complications
• increased spending in the economy
• reduced cost of overtime and agency fees
• enhanced patient

A reduction in the nursing and midwifery staff turnover by 3 per cent could result in an avoided cost of $86 million.

A one-third reduction in hospital- acquired admissions could result in improved Commonwealth revenue of $30.3 million.

A 15 per cent wage increase could lead to an economic benefit of $539.2 million through increased spending in the economy.

By recruiting additional nurses and midwives to finish the rollout of safe staffing levels, and by converting AIN positions to supernumerary, the state could save $54 million in overtime and agency fees, and reap an economic benefit of $129.8 million through new job creation.

NSWNMA General Secretary Shaye Candish said the significant funding opportunities and cost savings identified in the report were compelling and further strengthened the feasibility of the union’s 2024 pay and conditions claim.

“This report demonstrates how the NSW Treasurer can afford both higher wages and more nursing and midwifery positions, by removing systemic inefficiencies in the healthcare system,” Shaye said.

“We can see more than $3 billion in untapped Commonwealth funds from the past five years because patient data is not being captured correctly.

“Our proposal shows that by improving NSW Health’s current patient reporting and accurately processing each treatment, access to Commonwealth funding, and the subsequent cap, will increase substantially.

NSW Health no longer an employer of choice

The NSWNMA business case pointed out there is a shortage of nurses and midwives willing to work under existing conditions, resulting in understaffing and piling pressure on the existing workforce.

“This, in turn, increases their workload and stress levels, leading to significant burnout,” it said. “NSW public hospitals find it challenging to compete with healthcare systems in other states, which offer better salaries, working conditions (ratios) and benefits packages.

“As a result, NSW Health appears to be falling behind as an employer of choice. This is leading to LHDs struggling to both recruit and retain nursing and midwifery roles.”

The proposal said NSW has consistently had the highest proportion of non-practising RNs and midwives, who are choosing not to participate in and/or are not being used by NSW Health.

It calculates that by making working conditions and pay more attractive, NSW could bring an estimated 617 experienced nurses and midwives back into the healthcare system.

This would reduce its proportion of non-practising nurses and midwives to align with the Queensland/Victoria average.

It said NSW nurses and midwives’ wages have declined in real terms. A first-year nurse/midwife in 2023 was $2,825 worse off than they were in 2012, when salaries are adjusted for inflation.

“The stagnated wage growth is a direct result of the previous state government-imposed annual cap on wage growth for public sector workers.

“The new Industrial Relations Act removes any such cap; however, given the current cost of living and previous stagnation, significant improvements will be needed to achieve a competitive workforce,” the proposal said.

NSW Health no longer an employer of choice

The NSWNMA business case pointed out there is a shortage of nurses and midwives willing to work under existing conditions, resulting in understaffing and piling pressure on the existing workforce.

“This, in turn, increases their workload and stress levels, leading to significant burnout,” it said. “NSW public hospitals find it challenging to compete with healthcare systems in other states, which offer better salaries, working conditions (ratios) and benefits packages.

“As a result, NSW Health appears to be falling behind as an employer of choice. This is leading to LHDs struggling to both recruit and retain nursing and midwifery roles.”

The proposal said NSW has consistently had the highest proportion of non-practising RNs and midwives, who are choosing not to participate in and/or are not being used by NSW Health.

It calculates that by making working conditions and pay more attractive, NSW could bring an estimated 617 experienced nurses and midwives back into the healthcare system.

This would reduce its proportion of non-practising nurses and midwives to align with the Queensland/Victoria average.

It said NSW nurses and midwives’ wages have declined in real terms. A first-year nurse/midwife in 2023 was $2,825 worse off than they were in 2012, when salaries are adjusted for inflation.

“The stagnated wage growth is a direct result of the previous state government-imposed annual cap on wage growth for public sector workers.

“The new Industrial Relations Act removes any such cap; however, given the current cost of living and previous stagnation, significant improvements will be needed to achieve a competitive workforce,” the proposal said.

“We know patients are getting sicker and presenting to NSW public hospitals acutely unwell and in need of care, but the data being captured by NSW Health is not reflecting the treatment that is provided, resulting in available Commonwealth funding not being claimed.”