A long-overdue pay rise for aged care workers could help attract more staff to the struggling sector as it receives a billion-dollar budget boost.
Treasurer Jim Chalmers says a responsible federal budget has allowed for tens of thousands of workers to receive the much-needed pay increase.
More than 250,000 workers in the sector are set to get a 15 per cent increase in their wages as part of an $11.3 billion funding injection in the upcoming budget.
It follows a recent decision by the Fair Work Commission on increasing wages for aged care staff from July.
Dr Chalmers said aged care workers deserved the pay increase.
"This is what's possible when we put the national budget on a more responsible and more sustainable footing," he said.
"We've gone out of our way here to make sure that we can afford and that we can work through in a responsible way this historic pay rise for aged care workers."
The biggest ever pay rise for workers including registered nurses, cooks and home care workers follows a royal commission recommendation for aged care staff wages to be lifted.
A personal-care worker on a level-four aged care award will take home $141.10 more a week, or more than $7300 a year, under the changes.
A registered nurse on a level-2.3 award will pocket an extra $196.08 a week, or more than $10,000 a year.
The treasurer said the lift in pay would help tackle rising living costs.
"When it comes to inflation, decent wages for working people is part of the solution, not part of the problem," Dr Chalmers said.
"Next Tuesday's budget will make really important investments in workers but also in the care economy more broadly, and the budget will be all about responsible cost of living relief."
Aged Care Minister Anika Wells said the 15 per cent increase would be a "seismic shift" for aged care.
"Today's pay rise will bring 10,000 more workers to the sector ... we all know that the workforce crisis is the biggest issue facing aged care," she said.
"We will continue to work with everybody on this to make sure that we do get enough workers not just in aged care but in the broader care economy."
Patricia Sparrow, from peak aged care body COTA Australia, said the workforce had been undervalued for too long.
"This funding boost will, among many things, help ease the workforce pressures and ensure we have nurses available 24/7, which was a key recommendation of the royal commission and something older Australians have long advocated for," she said.
But she said transparency was needed to ensure the money went directly to workers and was not simply going to providers' bottom lines.
United Workers Union aged care director Carolyn Smith said many people had worked double and triple shifts during the COVID-19 pandemic to keep residents safe and facilities operating.
"The 15 per cent pay rise is a major step towards recognising the incredible sacrifices aged care workers have made," she said.
The Aged and Community Care Providers Association said the pay rise would help stem the exodus from the sector, which was under increasing pressure to deliver more services.
"We know that the demand for workers in aged care will double by 2050, so we are grateful the government has recognised that we need to do all we can now to reward aged care staff for the important work they do every day," association chief executive Tom Symondson said.
Shadow treasurer Angus Taylor said the government's spending was adding to inflation.
"Labor's kept talking a big game about how they're doing all the right things, but we have world-beating inflation. Australia loves to be a world-beater, but not in this way," he said.
© AAP 2023