A spokesperson of the Australian Council of Trade Unions said on Monday that low-paid workers should have their salary increased this year to compensate for the wage freeze last year.

A total of 1.4 million lowest paid workers were not given an increase last year due to the struggle felt by some businesses after the global financial crisis hit.

According to ACTU, low paid workers only received $545 a week and they deserve to receive a cash-up pay of $27 a week to make up for the pay freeze over the past two years.

The government, which was hesitant in the beginning to endorse the proposal, said there should be a consideration in wage increase that reflects the cost of living since the last wage rise.

It was also mentioned in the government's case study that working Australians are entitled to share in the benefits of the economic recovery.

Fair Work Australia, the government's new regulator, will open a special panel to review the issue, particularly on the wage increase on the workers for this year.

The regulator will hold public hearings in Melbourne this week to oversee the post-budget submissions.

ACTU secretary Jeff Lawrence said the government's statement should mean that it endorses the union's plan for a catch-up pay.

"I think it's the right thing to do. The government has recognised that minimum wage workers need protection,” Mr. Lawrence said.

"We have less than 20 per cent of the workforce now who are dependent on award wages directly and that's a big change from, say, 20 years ago.”

Peter Anderson, chief of the Australian Chamber of Commerce and Industry suggests that workers should receive a raise between $10.50 and $12.50 per week.

Mr. Anderson said the government's case will not only hit big end towns, but also smaller and medium businesses who are also affected of a two-speed economic recovery.