Aged care workers will miss out on a 3.5% pay increase after the Federal Government moved to scrap Labor’s Workforce Compact for the sector.

Last week’s decision by the Coalition Government to abandon the $1.1 billion scheme will affect thousands of workers and reduce pay rates by up to $2,400 a year.

According to Labor, some 250 aged care providers had applied for the supplement before it was suspended by the Coalition.

Shadow Aged Care Minister Shayne Neumann said the Coalition had “no response to the crisis in the aged care workforce which has a high turnover of staff, boasts some of the lowest paid workers in the nation and cannot provide enough staff to meet the explosion in demand for aged care services”.

The scrapping of the aged care scheme comes on top of the Coalition’s decision to jettison pay increases for childcare workers and its failure to prevent the collapse of GM Holden’s manufacturing operations in Australia.

“These are all worrying signs that the Abbott Government has its priorities wrong,” said Craig McGregor, VHPA Secretary.

“As the economic outlook darkens and workforce shortages and training issues persist in sectors like aged care and childcare the Government should be doing more to protect the jobs and pay of Australian workers in these valuable industries.”

>> No pay rise for aged care workers after Coalition scraps Workforce Compact fund