Prime Minister John Key says the Government simply does not have enough money to improve wages in the elderly care sector.
Equal employment opportunities commissioner Dr Judy McGregor recently went undercover in the industry, and her report has slammed working conditions, likening it to a type of modern-day slavery.
She found nearly all the workers were women, who earn as little as $14 an hour, and called for extra funding to bridge a pay gap between those who work in public hospitals and private homes.
The Government funds aged care through DHBs which give money to hospitals and private providers but in some cases the difference between wages was found to be as much as 20%.
Speaking on TV ONE's Breakfast this morning, Key said it would cost $140 million a year to plug the gap, and that was not possible at the moment.
"In reality it's one of those things we would love to do if we had more cash," he said.
"As the country moves back to surplus it's one of the things we can look at, but I think most people will accept at the moment we do not have a lot of extra cash."
Key said the problem has been around for a while, and was not tackled even when Labour was in power and had greater reserves of money.
"There are lots of things we would like to address but the fastest way to do that is to grow the economy and therefore be in a position where we can afford to pay more," he said.
Online support for workers
Both the Green and Labour parties have thrown their support behind the recommendations.
Elderly care workers have also written on the ONE News Facebook page saying they have felt undervalued for years.
"It's time we acknowledged these hard working low paid people and that greedy rest home owners and private health care providers shared a little of their massive profits with their staff," Beverly Jackson said.
Ripeka Armstrong said she admired the compassion of people who worked in the sector.
"They are undervalued and undermined by the health sector, they need to be properly and respectfully acknowledged," she said.
McGregor's full report, Caring Counts, is released today and outlines a 10-point plan based on evidence gathered from nearly 900 participants over a 12-month period in 2011-12.