Albanese Govt Proposes Phased Rollout of Aged Care Worker Pay Rise

 

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The Albanese government has proposed implementing the 23% pay rise recommended by the Fair Work Commission for aged care workers in a staged manner. Rather than an immediate full increase starting in January 2025 as originally proposed, the government is advocating for spreading out the raise over two years. This staged approach aims to relieve potential negative impacts on workforce availability in other sectors of the economy caused by large one-off wage boosts.

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Under the proposed arrangement, direct care workers primarily involved in patient care would wait until January 2026 to receive the complete pay increase. Indirect workers including administrative staff, cleaners, and food providers appear set to see their smaller wage boosts commence in January 2025. This separation in start dates reflects the government’s acknowledgment of the importance of addressing pay disparities within the sector, balanced against broader economic considerations and the government’s fiscal policy.

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The phased implementation of the proposed wage rise is expected to trigger significant investments in the aged care sector. Beyond the $11.3 billion allocated over four years in the 2023 budget for an interim pay increase, several more billions are projected to be injected into aged care as a result of the staged raise. The government’s financial commitment underscores its recognition of the significance of adequately compensating aged care employees and contributing to the industry’s sustainability.

The government’s proposal for a staged approach to the raise is grounded in several rationales and considerations. Firstly, it acknowledges the prevalent labor shortages across other sectors of the economy including healthcare, disability care, and childcare. By adopting a phased strategy, the government aims to prevent large wage increases from drawing workers away from industries facing workforce deficiencies. Moreover, the government emphasizes its fiscal policy centered on advancing the budget position while decreasing net debt as a proportion of the economy over time. This balanced approach seeks to address the demands of aged care workers for fair remuneration while taking into account the broader economic context and fiscal responsibilities.