Jim Chalmers is hit with the question everyone wants answered as 250,000 workers get a $10,000 pay rise… and interest rates continue to rise and the cost of living rises
- Treasurer asked about pay raises on inflation
- Plan to spend $11.3 billion on raising wages
Treasurer Jim Chalmers has denied that 15 percent pay increases of up to $10,000 for 250,000 aged care workers will add to Australia’s inflationary pressures.
The federal Labor government is budgeting $11.3 billion over four years to ensure low-wage workers in the predominantly female healthcare sector get a decent pay rise during a cost-of-living crisis.
This funding will implement the Fair Work Commission’s November decision to raise the minimum wage for aged care workers, nurses and personal carers from July 1.
At a media conference with Anika Wells, Secretary of Aged Care, Dr Chalmers was asked if this would increase inflation, which remains at levels more than double the Reserve Bank’s target of two to three percent.
Treasurer Jim Chalmers has denied that a $10,000 or 15 percent pay rise for 250,000 aged care workers will add to Australia’s inflationary pressures
But the treasurer was adamant not.
“When it comes to the inflationary impact, decent wages for working people, that’s part of the solution when it comes to cost-of-living pressures, not part of the problem,” he said.
“The advice we have received when it comes to this change in aged care, for example from the Treasury, is that the inflationary impact will be negligible.
“We want people to get decent wages.”
The announcement was made on Thursday, two days after the RBA surprised financial markets by raising interest rates another quarter of a percentage point to an 11-year high of 3.85 percent.
After the pause in April, this was the eleventh rate hike in a year.
Inflation fell to 7 percent in March, compared to a 32-year high annual rate of 7.8 percent in December.
The federal Labor government is budgeting $11.3 billion over four years to ensure that low-wage workers in the predominantly female care sector will get decent pay rises during a cost-of-living crisis (pictured depicts Aged Care Minister Anika Wells, left, and Treasurer Jim Chalmers at Goodwin Village Aged Care in Canberra)
But it’s still more than double the RBA’s two to three percent target, with Reserve Bank Governor Philip Lowe noting that it was still too high.
“Inflation in Australia is past its peak but is still too high at 7% and will take some time to get back into target range,” he said Tuesday.
Headline inflation, also known as the consumer price index, is significantly higher than last year’s wage price index of 3.3 percent, meaning that workers are effectively suffering from a reduction in real wages.
Dr. Lowe also expressed concern over higher wage growth, following a decade of below-average increases, with the unemployment rate at 3.5 percent at its lowest level in 48 years.
“Wage growth has picked up in response to the tight labor market and high inflation,” he said.
As part of Labor’s policy, a registered nurse with a level 2.3 salary gets an extra $196.08 per week, or more than $10,000 more per year.