The sizeable pay bump for hundreds of thousands of aged care workers has been defended from inflation fears by the aged care minister.
Anika Wells has dismissed the possibility of a wage-price spiral and says pay increases for the nation's lowest-paid workers isn't a major inflation driver.
"We don't have inflationary problems in this country because our lowest-paid workers are earning too much," the aged care minister told Sky News on Sunday.
"We have inflationary problems in this country because there is a war in Ukraine, there's uncertainty across the globe, we are in an inflationary cycle," she said.
Roughly 400,000 workers will receive a wage boost of up to 28 per cent after the Fair Work Commission delivered a landmark decision for the sector on Friday.
Personal carers will get an increase between 18.2 and 28.5 per cent, home-care staff will get a rise between 15 and 26 per cent and there will be a 6.8 per cent boost for those involved in support services.
Ms Wells said neither the Reserve Bank governor nor the Treasury secretary believed Australia was experiencing a wage-price spiral, which is where inflation expectations cause workers to ask for higher wages and businesses lift prices to cover those costs, in a loop.
The minister also fielded questions on the government-commissioned review into funding the aged care system.
"The very sustainability of this sector stands at risk because there isn't enough money going into a sector that needs more money when you look at the demographic trends before us," she said.
It's not yet clear if there will be reforms and funding arrangements in place in time for the May budget though Ms Wells confirmed there would be no new levy on Australian taxpayers, nor changes to the treatment of the family home.
A key recommendation of the taskforce was for those with more savings to pay more for their later life care to take pressure off the federal budget.
