New Zealand's industry body for rest homes and geriatric care facilities is seeing smoke signals that warn of increased industrial action in the sector.
According to healthcare providers, the District Health Boards, (DHB) are to be blamed for not funding from the aged care subsidy and hence increasing the risk of strikes in the sector.
Chief Executive Martin Taylor says the DHBs are offering an inflation adjustment of 2.8%, whereas inflation is running at 3.5%.
Taylor says providers have told him, very definitely that wage expectations from caregivers are much higher than the increase in funding.
This has come at a time when the Boards themselves have received an extra two billion dollars.
According to Taylor, unions are asking for an increase between five and seven percent, and there's no way those demands can be met.
He also adds that the crunch in funding would mean aged care providers would be unable to meet union demand for wage rises of more than five percent.