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Budget 2022: Cash boost for these Aussies

People walking and Australian money notes.
Aged care workers and public servants are set for a pay rise. (Source: Getty)

Pay rises are coming for aged care workers and public servants, with more details announced in tonight’s Federal Budget.

"Our new Government has already acted to get wages moving again," Treasurer Jim Chalmers said.

"First, for the lowest-paid Australians – supporting a pay rise for about 2.7 million workers on the minimum and award wages, the majority of them women.

"Next, by supporting a wage increase for aged care workers - again mostly women."

More Budget news:

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The Government committed to funding $2.5 billion to aged care over four years, it will also support a wage increase for aged care workers.

The Fair Work Commission is currently considering whether to lift wages for aged care workers, with unions calling for a 25 per cent pay rise.

The aged care sector is currently facing a shortage of 35,000 workers, according to a report by the Committee for Economic Development of Australia.

If shortages continue at this level, Australia will not have enough workers to meet basic standards of care.

This shortage has doubled in the past year, with the sector significantly impacted by the COVID-19 pandemic.

Public servants will receive a 3 per cent wage increase over the coming 12 months, as part of an interim workplace relations arrangement.

The pay rise will apply to all public servants who are due to receive an annual pay increase before August 31, 2023.

The interim arrangement is designed to allow for proper consultation on developing a longer-term policy.

The Community and Public Sector Union (CPSU) welcomed the announcement, but said it didn’t go far enough, with the pay rise still well below inflation.

Inflation is expected to peak at 7.75 per cent in December, before starting to decline in mid-2023.

"Wages are growing faster now than they were before the election, but that welcome news is tempered by rising electricity prices and grocery bills eating into pay packets," the Treasurer said.

Wages will go backwards

Wage growth is not expected to match the rising cost of living until 2024/25, based on current Treasury forecasts.

That means workers’ wages will effectively go backwards.

The Fair Work Commission raised the minimum wage by $40 per week on July 1, an increase of 5.2 per cent to the national minimum wage and 4.6 per cent to the award minimum wage.

The increase flowed through to industries heavily impacted by COVID on October 1, including workers in the hospitality, tourism and aviation industries.

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