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Reserve Bank governor Philip Lowe does not expect the Omicron variant to derail Australia's economic recovery but says the central bank board is prepared to remain patient before lifting the cash rate.

As widely expected by economists at the RBA's first board meeting of the year, it left the cash rate at a record low 0.1 per cent and is ending its multi-billion dollar bond buying program on February 10.

The program aimed to keep market interest rates and borrowing costs low.

"Ceasing purchases under the bond purchase program does not imply a near-term increase in interest rates," RBA governor Philip Lowe said in a statement after the meeting.

"The board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve."

Economists and financial markets had expected Dr Lowe to provide a more definite outlook for the cash rate after the unemployment rate dropped to 4.2 per cent, a year earlier than the RBA had been predicting, while inflation is also running well ahead of its expectations.

Financial markets have been pricing in the risk of a rise in the cash rate by mid-year, while economists had been gravitating towards a move at the August board meeting.

"As the board has stated previously, it will not increase the cash rate until actual inflation is sustainably within the two to three per cent target range," Dr Lowe said.

He said while inflation has picked up, it is too early to conclude that it is sustainably within the target band.

"There are uncertainties about how persistent the pick-up in inflation will be as supply-side problems are resolved," he said.

"Wages growth also remains modest and it is likely to be some time yet before aggregate wages growth is at a rate consistent with inflation being sustainably at target."

EY chief economist Jo Masters said the RBA board remains a long way from financial market expectations about the timing of the first rate.

"It's clear that policymakers want to see wages growth accelerate to be confident that inflation will remain within the target band, as supply disruptions fade," she said.

Key December quarter wages data is due on February 23.

Dr Lowe said the Australian economy remains resilient and spending is expected to pick up as Omicron case numbers trend lower, but he conceded the main source of uncertainty continues to be the pandemic.

The RBA now expects economic growth of around 4.25 per cent over 2022 and two per cent over 2023.

This is lower than the RBA's central case predicted in November when it had forecast growth of 5.5 per cent and 2.5 per cent respectively.

However, it has upgraded its annual underlying inflation forecasts after the unexpected jump to 2.6 per cent as of the December quarter, predicting 3.25 per cent in coming months before declining to around 2.75 per cent over 2023.

The central bank had previous not expected underlying inflation to hit 2.5 per cent until the end of 2023.

"One source of uncertainty is the persistence of the disruptions to supply chains and distribution networks and their ongoing effects on prices," Dr Lowe said.

"It is also uncertain how consumption patterns will evolve and how this will affect the balance of supply and demand, and hence prices."

Dr Lowe will get the opportunity to flesh out his expectations for the outlook when he addresses the National Press Club in Sydney on Wednesday.

The RBA will also release its quarterly statement on monetary policy on Friday which will provide its full suite of forecasts.

© AAP 2022

A government plan to gift aged care workers two lots of $400 cash bonuses has been criticised as a "sugar hit" that does little to improve the sector.

As aged care staff struggle to deal with rising cases of COVID-19 linked to the Omicron variant in residential facilities, Opposition Leader Anthony Albanese accused the government of neglecting staff.

Mr Albanese said he supported making a case to the Fair Work Commission to increase the rates of pay for aged care staff.

"The problem here is this (bonus) is a cash payment in the lead up to an election with no sustainable increase in their pay," Mr Albanese told reporters.

"Why is the government not providing support for aged care workers on a permanent basis?"

In an address to the National Press Club on Tuesday, Prime Minister Scott Morrison said the onus was on Mr Albanese to explain how such a permanent pay increase would be funded.

He said the $400 payments had been used previously for the aged care sector and were brought back because they were effective.

"We've already done this once before, and we know it works," Mr Morrison said.

"With the workforce challenges we've had, particularly over Omicron, that's why this has come about, not for any other reason as suggested."

Workers in the sector have criticised the government for a failure to provide adequate numbers of protective equipment and rapid antigen tests, while dealing with staff shortages due to rising virus cases.

Since the arrival of the Omicron variant in Australia, there have been more than 560 deaths in aged care.

Mr Morrison said more than 60 per cent of aged care deaths had been those in palliative care or end-of life care.

The prime minister acknowledged lessons had been learnt from COVID-19 deaths in aged care following the start of the pandemic.

"These are not simple issues with simple solutions," he said.

"Ninety-nine per cent of aged care facilities have been ... visited to offer those booster shots (and) we have not mandated the taking of boosters by aged care residents."

Despite the timing of the aged care worker payments, the government has insisted they were not pre-election sweeteners for the sector

Chief executive of Leading Aged Services Australia Sean Rooney said the federal government had a role to play for worker pay rates to help avoid a staff exodus.

"The government funds around 80 per cent of the aged care system with the remaining 20 per cent from contributions," he told Sky News.

"With 70 per cent of costs in aged care homes relating to wages, we need a commitment from the federal government."

The amount paid to aged care workers would depend on the hours worked by the employee.

Labor government services spokesman Bill Shorten says the government needs to increase the base wage of aged care staff.

"Increase the base rate and the sugar hit wouldn't be necessary. The base rate is what has to go up otherwise we are going to struggle to attract people to the industry," he told the Nine Network.

It comes as Australia registered another 77 deaths from the pandemic on Tuesday, with 34 of those from Victoria, 30 in NSW while there were 10 and three fatalities in Queensland and South Australia respectively.

Case numbers nationally remained stable, with more than 35,000 registered.

NSW had the highest total with 12,818 infections, followed by Victoria with 11,311, Queensland with 7588 and South Australia with 1266, while there were 522 in the ACT, 699 in Tasmania, 970 in the NT and 24 in WA.

© AAP 2022

The Reserve Bank of Australia says it is prepared to remain patient before it lifts interest rates, but it is ending its bond buying program as of February 10.

As widely expected the RBA left the cash rate at a record low 0.1 per cent at Tuesday's monthly board meeting, the first of 2022.

"Ceasing purchases under the bond purchase program does not imply a near-term increase in interest rates," RBA governor Philip Lowe said in a statement after the meeting.

"As the board has stated previously, it will not increase the cash rate until actual inflation is sustainably within the two to three per cent target range."

He said while inflation has picked up, it is too early to conclude that it is sustainably within the target band.

"There are uncertainties about how persistent the pick-up in inflation will be as supply-side problems are resolved," he said.

"Wages growth also remains modest and it is likely to be some time yet before aggregate wages growth is at a rate consistent with inflation being sustainably at target."

Financial markets have been pricing in the risk of a rise in the cash rate by mid-year, while economists appear to be gravitating to the August board meeting.

Since the board's last gathering the unemployment rate has dropped to 4.2 per cent, a year earlier than the RBA had been predicting, while inflation is also running well ahead of its expectations.

"The board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve," Dr Lowe said.

Prior to the meeting, federal minister Jane Hume played down the impact of a potential rate rise on households, while issuing a reminder that the RBA is an independent body and makes decisions that are separate from government.

"Interest rates have been at an historical low now for a considerable period of time," she told Sky News.

She conceded that the cost of living is high, and there is pressure on household budgets and interest rates will have an effect on that.

"The fact that Australians have more money in pockets now, thanks to the Morrison government's economic responses to COVID-19, there are tax cuts, there are more people employed now ... that's something I think that gives us cause for optimism," Senator Hume said.

Labor frontbencher Jason Clare was not so optimistic, saying whoever wins the federal election in a few months time will face higher interest rates.

"That will mean, for a lot of Aussies who stretch themselves to get a mortgage, then it's going to be tougher to pay a mortgage in the future," he told Sky News.

"Of course, that's all going to happen at a time where other things are going up - childcare costs are going up, the cost of petrol is going up. The only thing that's not going up at the moment is wages."

© AAP 2022