Treasurer Jim Chalmers says the nation's lowest paid workers should receive a pay rise that helps them to keep up with the cost of living, as the Fair Work Commission reviews pay rates.
Mr Chalmers said the government would not put a figure on its submission to the minimum wage review, but the unions have pushed for a substantial pay rise of 7 per cent, to help minimum wage and award workers keep up with inflation.
The treasurer told ABC Radio minimum wage workers were not the ones driving the cost of living crisis.
"Some people want to pretend that we've got an inflation problem in our economy because the lowest paid Australians are getting paid too much, and that is obviously absolute rubbish," Mr Chalmers said.
"We've got an inflation problem because of a war in Ukraine combined with neglected supply chains over a wasted decade, which has made us more vulnerable to some of these supply shocks."
The Australian Council of Trade Unions (ACTU) has argued for the minimum hourly rate to be lifted to $22.88, keeping pace with inflation.
"We must support those who are hurting the most and a cost of living increase to the minimum wage is the direct way of doing this," ACTU secretary Sally McManus said.
"There is no wage-price spiral in Australia. Instead, companies have been posting huge profits, driving inflation through excessive price rises. It's time they conceded they can afford to pay their workers more."
Mr Chalmers said he did not want to see the lowest paid workers in the economy "go backwards", and that the government's submission would be consistent with that, but did not say whether that extended to award workers.
The new wage rate, which would affect more than 2.5 million workers, will come into effect from July.
Optimism ahead of RBA interest rate meeting next week
Next week the Reserve Bank will meet again to decide whether to lift interest rates further.
For the first time since it began lifting rates almost 12 months ago, the RBA has flagged it will consider pausing rate rises.
Mr Chalmers said while inflation was still running too hot, there were signs it was moderating, including relatively flat retail sales figures released this week.
And while the coming May budget would need to be carefully "calibrated" to ensure government spending did not further fuel inflation, Mr Chalmers said addressing acute cost of living concerns was a priority.
"We have said throughout that when we can afford to provide a bit more help to people then we will look to do that," Mr Chalmers said.
Mr Chalmers also said he had received a wide-ranging review of the RBA, which the government would release in April.
