Animal and Veterinary Services Award has increased by 3.5% from the first full pay run after 1 July 2025
Whist the Australian Bureau of statistic clearly shows the current inflation rate to be 2.4%, the somewhat surprising decision has been made to increase wages a full 1.1% above the inflation rate.
In the January to March quarter, accounting bodies across Australia were convinced that wage awards were going to increase in line with inflation at 2.4% as this seemed to be a sensible approach in light of the fact that GDP per capita growth has dropped significantly.
The first reality check came when a month ago, the minimum wage award was instead increased by 3.5%. This gave a clear indication of what was likely going to happen with the wage awards the next month.
Whilst most of our clients pay above award, we know from prior increases that there is an inherent expectation by all employees that their wage increases by this amount in spite of being paid well above award.
What does this actually mean for our general economy and the veterinary economy? As a simple explanation, GDP (Gross Domestic Produce) per capita
is an indication of how much each member of the population produces each year. If this production rises by less than the wages, then that means there is less residual money left to spend for businesses and individuals alike. It means less tax gets paid to the tax office, leaving the country in financial deficit. It also means less goods are produced leaving shortages of some of the things we enjoy every day, like houses.
This is not a phenomenon isolated only to Australia, it is a global problem where governments are struggling to align the quality of life of individuals with the goods that need to be produced profitably by businesses to maintain that quality of life.
The global housing crisis is a good example of this dilemma. There are not enough houses because the building industry cannot build them quickly enough and they cannot get supplies quickly enough. If builders try to scale up their businesses their wages increase too much, the ability to have a flexible workforce is impaired and they have additional compliance rules – the risk is too high. The end result is a dilemma – in an effort to improve lifestyle for everyone by increasing wages, the downside is a housing shortage and high house prices that even the wage increases cannot keep up with. Another term that is used for this and is commonly being used in the media is ‘productivity crisis’.
So what does this mean for the veterinary industry? The term ‘productivity crisis’ actually sums it up well and also gives a clue to the solution – in fact the only solution available at the moment – that is to increase what would effectively be the GDP per capita for your veterinary practice.
In simple terms this means increasing the total sales per vet which in 2024 were $640,000 excl GST. It’s going to need to go up in 2025!
The first and easiest approach is to increase prices, but much like the housing crisis, there comes a point where it becomes ‘unaffordable’ regardless of how desperate people are, we just don’t know where that point is yet for veterinary services. Those of you who attended our very popular web event last month on Strategic Pricing will have got a really clear explanation on how to deal with price changes in a safe manner in the current market.
The second and not so easy solution is to increase the efficiency of your business. This means your team has to do more work without feeling like they are working much harder – a paradox in itself! But it is possible by implementing things like voice to text clinical notes, utilising all the features of your practice software like billing templates, well structured rosters, well structured surgery days, online appointment scheduling, keeping your appointments running on time, receptionist training, nurse consults and outsourcing work like bookkeeping.
In summary for the veterinary award, the allowances that have increased are:
– Broken Shift Allowance has increased from $16.52 to $17.09
– First Aid Allowance has increased from $20.23 to $20.94
– On Call (Monday to Friday) has increased from $21.37 to $22.12
– On Call (Saturday) has increased from $32.10 to $33.23
– On Call (Sunday or Public Holiday) has increased from $37.37 to $38.68
– On Call duty – veterinary surgeons, has increased from $52.23 to $54.06.
This is just a simple summary, review each award carefully before making changes.
