Jim Chalmers still open to JobSeeker increase

Jim Chalmers has not ruled out raising the JobSeeker rate after key members of a committee reviewing the welfare payment backed its increase.

Treasurer Jim Chalmers. Picture: NewsWire / Monique Harmer

Jim Chalmers has not ruled out raising the JobSeeker rate after key members of a committee reviewing the welfare payment backed its increase.

While stressing the government did not yet have a plan to boost JobSeeker in the May budget beyond its current rate of $48 a day, the Treasurer said Labor had not “come to a concluded view” about whether the payment was adequate going forwards.

“We don’t have a proposal on the table to do that but we’re listening respectfully to a lot of people in the community who were advocating for that and campaigning for that,” Dr Chalmers said on Sky News on Tuesday.

“We’ve got a committee, an Economic Inclusion Committee which Jenny Macklin chairs, that Amanda Rishworth and I have been participating in and that’s all about trying to work out how do we get these various work incentives and payments right, into the future.”

Dr Chalmers said Labor “always wanted to do better for people if we can” but such reforms needed to be weighed against “other pressures” facing the economy.

“Always, when you’re a Labor government and you know that people are doing it tough, you do what you responsibly can,” he said on the Nine Network’s Today.

“But you’ve got to weigh it up with the fact we’ve got a trillion dollars of debt in the budget and we’ve got to make it all add up.”

The comments follow The Australian revealing on Tuesday that several members of the committee believed the JobSeeker rate was too low.

Australian Council of Social Service chair Cassandra Goldie said the payment needed to be increased to “at least $73”, while associate professor Ben Phillips from the Australian National University’s College of Arts and Sciences said living standards for jobseekers were “dramatically lower” than the rest of the population.

The Greens seized on the renewed pressure facing the government to increase the payment, which it believed needed to be set at $88 day. Greens social services spokeswoman Janet Rice said the cost-of-living crisis had brought home the need to lift jobseekers above the poverty line.

“A government has a moral responsibility to ensure its citizens aren’t left starving. Poverty is a political choice,” she said.

“Labor should scrap the stage three tax cuts and invest that money into raising all income support payments above the poverty line and building a proper social safety net for all Australians.”

Commonwealth Bank head of Australian economics Gareth Aird said increasing the payment would drive inflation up and that any increase needed to be carefully managed to ensure it didn’t become a “disincentive” for work.

“At the margin, any time you’re pushing cash into the economy directly, it puts upward pressure on prices for goods and services,” he told The Australian.

“It’s really important to strike the right balance between assisting someone who’s looking for work to actually manage expenses and be able to live but, at the same time, not create a disincentive for work.”

Mr Aird said a “one-off adjustment” to the payment rather than a “baked-in” percentage increase every year would ensure inflation was driven upwards.

“If it’s a one-off adjustment, then the inflationary impact would be very modest,” he said.

“Then you’re basically saying, ‘look, we’ve had this exceptional year of an increase in prices … and we’ll move the JobSeeker payment upwards to reflect an adjustment in the cost of living but we’re not making that increase every year’.”