SYDNEY (Reuters) – Australia’s Labor government on Thursday said it would set aside A$11.3 billion ($7.5 billion) in next week’s federal budget to fund a 15% pay rise for retirement home staff as the sector grapples with a shortage of skilled workers.
The increase in wages, over the next four years from July 1, will bump up the salaries of 250,000 workers, with registered nurses expected to get an additional A$10,000 a year.
“Today, we turn a corner for aged care in Australia … long deserved, long awaited for,” Aged Care Minister Anika Wells said during a press conference. “That is life-changing money for people.”
“That is enormous and that properly and fairly addresses the costs of delivering quality aged care in this country,” Aged Care Minister Anika Wells said during a media briefing.
About a quarter of a million elderly and disabled Australians live in care homes. That number is expected to rise significantly as the country’s “Baby Boomers”, estimated at more than 5 million people born between 1946 and 1964, grow older and need additional care.
Australia’s deficit is expected to shrink sharply, when the government releases the budget on Tuesday, as its coffers bulge with tax windfalls from commodity exports, yet the outlook will be a sober one as fiscal challenges loom large.
Treasurer Jim Chalmers tried to deflect questions if the pay hike will worsen the deficit and stoke inflation after the Reserve Bank of Australia on Tuesday stunned markets with a rate rise to fight it when traders had looked for an extended pause.
“We’ll take the pressure off the budget in some areas and there will be additional pressures on the budget in other areas and we will make room for important priorities like the one we’re talking about today,” Chalmers told reporters.
($1 = 1.4988 Australian dollars)
(Reporting by Renju Jose in Sydney; Editing by Lincoln Feast)
