Health Minister Pete Hodgson has acknowledged that nurses working with the elderly in residential care deserved more money, saying the "catch-up" for nurses and other staff in the sector was not yet complete.
Speaking to the Nurses Organisation annual conference in Wellington, Mr Hodgson said there was a cycle tobreak.
"It is unusual to talk too much about Budgets yet to be announced, but in the case of the aged residential sector I freely acknowledge that the catch-up for nurses and also for the many other staff working in the sector is not yet complete.
"That is on my mind for the May 2007 Budget and work on that Budget has already begun."
Progress had been made over the past couple of years with a total 9 per cent increase in Government funding for rest homes and 12 per cent for hospital and dementia units.
"That's progress, but it is not sufficient progress," he said.
Mr Hodgson said the Government had devolved funding of aged residential care to district health boards (DHBs) about three years ago.
In December 2004, the Cabinet had agreed to a 2 per cent increase outside the Budget cycle after concern about the level of funding the resident aged care sector was receiving.
In last year's Budget, a "hefty" funding increase was made to DHBs, Mr Hodgson said.
"Just under half of it went no further, as the devolution of September 2003, had not, it turned out, been fully funded by the Government. However, the other half, about 4 per cent, made it through to the sector."
Nurses employed at DHBs received a significant wage settlement. This inevitably skewed the market for nurses who were employed by the private sector.
In some areas there had been a limited ability to pay and that was reflected in the May 2006 Budget, which saw about a 3 per cent increase for rest home beds and about a 6 per cent increase for dementia and hospital beds "because it is in those facilities where one can expect to find more nurses".
Mr Hodgson said he also changed administration processes so that the funding flowed from July 1 rather than later in the year.
