The Australian government has proposed delaying significant pay rises for aged care nurses until 2027, sparking backlash from unions and sector advocates who fear the move could deepen workforce challenges and lead to further dissatisfaction among aged care professionals.
The Fair Work Commission (FWC) recently recommended pay increases of up to 25% for 60,000 aged care nurses to address long-standing gender-based undervaluation of their work.
This decision builds on an interim 15% increase granted last year for direct care workers, including nurses, at a cost of $11.3 billion over four years.
While the Commission proposed phasing these new increases across three stages, starting January 2025, the Albanese government has suggested pushing the timeline back to as late as October 2027.
The government cited concerns about the financial implications of implementing the increases sooner. According to its submission to the FWC, commencing substantial wage rises before aligning funding commitments could jeopardise the financial viability of aged care providers, many of which are already struggling.
It also warned that large wage increases could pull workers from other sectors experiencing similar shortages, such as hospitals, disability care, and childcare, creating a ripple effect across the broader care economy.
Additionally, the government argued that the funding process for aged care, which involves subsidies to providers, requires significant preparation.
The Independent Health and Aged Care Pricing Authority (IHACPA) would need to provide updated pricing advice to calculate the funding necessary for the wage rises, a process it claims could take months.
The Australian Nursing and Midwifery Federation (ANMF) has criticised the government’s approach, describing the proposed delays as “too protracted” and potentially harmful to the workforce.
Speaking to the Financial Review, ANMF Secretary Annie Butler expressed concern that under the government’s timeline, some direct care workers may end up earning more than enrolled nurses for extended periods, exacerbating dissatisfaction and potentially driving nurses out of the sector.
“Our members are not going to be happy about this,” Butler said. “The aged care sector is already struggling with retention issues, and delaying these pay rises only makes it harder to compete with public health systems offering better pay and conditions.”
The union has advocated for a more accelerated phase-in, suggesting two tranches in 2025 rather than spreading the increases over multiple years.
Industry experts acknowledge the complexities of balancing pay rises with financial sustainability. Grant Corderoy, a senior partner at aged care consultancy Stewart Brown, estimated that the proposed increases could cost the government an additional $650 million annually over four years.
Employers, represented by the Aged & Community Care Providers Association, support the increases in principle but favour the government’s cautious approach to implementation.
“The real risk here is that aged care loses its ability to retain and attract workers while trying to navigate these funding delays,” Corderoy warned.
The debate comes as the government grapples with cost-of-living pressures and its fiscal strategy to reduce inflation and public debt. With the next federal election due by mid-2025, the handling of these pay rises is likely to become a contentious issue, particularly given Labor’s promises to support aged care reforms.
The FWC is expected to make a final decision on the timing and phasing of the increases in the coming weeks. While it cannot compel the government to expedite funding, its ruling will set the framework for how and when aged care nurses can expect their pay adjustments.
