Health authorities across NSW are spending hundreds of millions of dollars to fill nursing vacancies with agency staff on locum rates.
Key points:
- Hundreds of nursing vacancies across NSW are now filled by agency nurses
- The casual staff are paid more to do the same job as permanent nurses
- The situation is costing NSW Health hundreds of millions of dollars
Agency nurses are employed by an independent company and work in the public system as contractors rather than full-time employees.
The situation is particularly acute on the state's north coast, where the Northern NSW Local Health District spent more than $400,000 a day on agency nurses and locum doctors in the last financial year.
The organisation's recent Annual Public Meeting was told agency workforce costs totalled $148 million for 2022–23.
That figure represented 13 per cent of its total budget, and included $68 million in wages and $16 million spent on accommodation and travel for agency nurses.
Chief executive Tracey Maisey said it was a situation that had to be addressed.
"Agency staff obviously help to provide excellent healthcare services every day and we wouldn't be able to do that without them, but they do come at a cost," she said.
'Hyperinflation' spiral
In the Western NSW Local Health District (WNSWLHD), which covers from Bathurst to Bourke, spending on agency nurses has increased by 238 per cent in fewer than three years.
WNSWLHD chief executive Mark Spittal told a recent public meeting it had no alternative but to rely on agency nurses as a "stop-gap measure".
In a submission to the current healthcare funding inquiry, the WNSWLHD said nursing costs were experiencing "hyperinflation" as a result.
The submission stated agency nursing costs had increased from $6 million to $37 million in the past seven years, without including the additional cost of travel and accommodation.
"The demand for agency staff increases the agency or locum rate, which in turn further increases the attractiveness of locum or agency work," it said.
"This self-perpetuating cycle is completely unsustainable."
In the state's south, the Murrumbidgee Local Health District told the ABC it spent about $50 million on its locum and agency workforce in the past financial year, which was about 12 per cent of its permanent workforce budget.
The ABC also raised the issue with the Hunter-New England LHD, which said its "premium cost of labour" amounted to $55 million during the past financial year.
The cost of lower wages?
The union representing nurses said those working in NSW were among the lowest paid in Australia.
Figures from the Australian Institute of Health and Welfare showed the average salary for a full-time nurse at a public hospital in NSW in 2021–22 was about 8 per cent below what was on offer in Queensland and Victoria.
NSW Nurses and Midwives Association assistant general secretary Michael Whaites described the current situation as a "mess".
"You're getting into a false economy," he said.
"Losing nurses over the border, and paying a much higher premium for the same sort of worker to backfill that position … something has to shift."
Mr Whaites said agency nurses deserved to be paid a premium as they were not entitled to benefits such as sick leave and holiday pay.
But he said it was disheartening for permanent staff to know they were being paid less to do the same job.
"When our members understand that the person next to them is being paid almost double what they are for that shift, you can understand why some of those members might start thinking they would be better off under an agency," Mr Whaites said.
"It's a mess after years of neglect, and one that desperately needs addressing."
Agencies are a 'safety net'
Brooke Lord is head of advocacy at the Recruitment, Consulting and Staffing Association, the country's peak body for the recruitment and staffing industry.
She said agency nurses were the "safety net" of the health care system, particularly in regional areas.
"Without them the system would not operate the way that we're accustomed to, there would be huge gaps in care continuity," Ms Lord said.
"They make sure that if a direct-hire staff can't be there to perform a role there's someone there who can do it."
Ms Lord said the need to increase wages to attract people to regional areas was the main issue.
"What we have seen across the board is a huge uptick in wages for agency nurses — we saw that post-COVID when there was enormous demand and very little supply," she said.
"It's less about agency margins, it's more about the nurse wages and how we incentivise nurses to come and spend time in the regions."
Reform needed
NSW Health Minister Ryan Park said "seismic structural reforms" were needed to address worker shortages facing regional health jurisdictions across the country.
He accused the previous state government of overseeing "12 years of underinvestment" in the health workforce.
"Since taking office we have saved the jobs of 1,112 nurses and begun work to implement safe staffing levels including funding … an additional 1,200 nurses and midwives in our hospitals," Mr Park said in a statement to the ABC.
He said the government was also establishing a Safe Staffing Levels Taskforce and abolishing the wages cap.
But for now, the Northern NSW LHD is turning its sights overseas to fill the gaps in its nursing rosters.
"We've got over 100 we'll be bringing in permanently from overseas, and they've already started arriving," Ms Maisey said.
The Murrumbidgee Local Health District also told the ABC an overseas nursing recruitment program undertaken early this year was helping boost nurse numbers in its region, but it did not specify how many nurses were employed as part of that program.
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