What's important to remember is that inflation is always a pay cut. If you do not get a raise above inflation every year, you are making less money each year. Inflation over the last 3 years in Australia was 2.3%; however inflation this year has sharply risen and is on track for 4% by the end of the year (assuming the Iran war ends today and we magically fix the results of the war literally today, neither of which will happen so we can assume it'll be even higher).
This deal, at most, gives a 0.3% pay raise per year. At worst it is a 0% pay raise per year when adjusting for inflation, assuming they actually calculate their cost of living adjustment properly.
So really, the government says these people deserve no raise whatsoever, or no raise that will make any difference. While the union is saying they're valuable enough that they should be paid more, and not just not lose their pay.