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Government to spend $11.3 billion over four years to fund 15% pay rise for aged care workers

  • Written by Michelle Grattan, Professorial Fellow, University of Canberra

Tuesday’s budget will include $11.3 billion over four years to fund the 15% pay rise aged care workers will receive from July 1.

The rise was awarded by the Fair Work Commission. Labor committed at last year’s election to fully fund a rise in pay for this sector.

Given acute staff shortages, it is hoped that the higher wages will attract more workers.

The pay rises will benefit more than 250,000 people.

A registered nurse on a level 2.3 award wage will receive an extra $196.08 a week – more than $10,000 a year.

A personal care worker on a level 4 (aged care award) or a home care worker on a level 3.1 (social, community, home care and disability services award) will get an extra $141.10 weekly – more than $7300 annually.

Recreational officers and chefs in the sector also are in line for increases.

Treasurer Jim Chalmers said that “for too long, those working in aged care have been asked to work harder for longer without enough reward, but with this budget that changes”.

Aged Care Minister Anika Wells said that “fair wages play a major role in attracting and retaining workers”.

Aged care is now the fifth-largest area of federal government spending. This financial year the cost of aged care will increase from $24.8 billion to an estimated $29.6 billion (23%).

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There are about 1.5 million recipients of aged care in Australia, with growing pressures on the system ahead as the population ages.

In a round of Wednesday media appearances, Chalmers reiterated next week’s budget would contain “substantial cost-of-living relief”.

“It’ll prioritise the most vulnerable. It won’t just be limited by age, and it will be responsible.”

Chalmers said the budget would forecast the economy slowing considerably but not going into recession.

“The budget will be a difficult balancing act, between providing the cost-of-living relief that people need, being conscious of the pressures on the budget and all of that debt that we inherited, but also making sure that we can grow our way out of this slowing economy by investing in things like energy and laying some of these foundations for growth in our economy.”

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Chalmers said the budget would also contain efforts “to get people into work if they want to work, including in communities where there has been for too long entrenched disadvantage”.

“We’ve got colleagues working on the job agency system to make sure that if people want to work, they can grab the opportunities of an economy that’s got unemployment currently running at three and a half per cent.”

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