RBA to watch for ‘spillover’ from aged care pay rise

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The RBA governor will watch for spillover effects from the “very worthy” aged care pay rise of up to 14 per cent but predicts it’s unlikely to shift forecasts for wages or inflation.

Already a subscriber?The Reserve Bank will watch for spillover effects from last week’s “very worthy” aged care pay rise of up to 14 per cent for some 300,000 workers, but predicts it is unlikely to shift forecasts for wages or inflation.

The Reserve Bank board said wage growth appeared to have peaked last year at 4.2 per cent but that this would only remain consistent with inflation if productivity increased to its long-run average. “Some of the numbers are a little bit smaller but you’ve also got broader scope for cleaners and those marginally attached to aged care,” he said.

“Broadly we think we will be around these levels on a year-on-year level for a few months,” he said.A spokesman for Downer, which owns cleaning giant Spotless, said it “does not expect this decision by the FWC to have an immediate impact on our ability to attract and retain cleaners in other sectors”.

“The complexity at the moment is the variations in the pay increases depend on positions , so it’s difficult to estimate the cost. As more details arise then we can establish a more accurate estimate.”

 

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