Labor pushed to expand welfare

A committee hand-picked by Jim Chalmers to advise policies to improve economic and social inclusion has urged Labor to massively increase social welfare spending in the budget.

Former deputy Labor leader Jenny Macklin. Picture: AAP

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A committee hand-picked by Jim Chalmers to advise on ­economic and social inclusion has urged Labor to massively ­increase welfare spending in the March 25 budget, arguing ­renters and those on benefits are falling behind in the cost-of-living crisis.

The Treasurer is expected to again reject the vast bulk of the recommendations from the economic inclusion advisory committee, which was established in 2022 as part of a deal with ACT senator David Pocock to secure his vote for the Albanese government’s industrial ­relations reforms.

The committee, chaired by former deputy Labor leader Jenny Macklin, recommended the government “substantially increase the base rates of Jobseeker and related working age payments”.

The committee also includes ACTU secretary Sally McManus, economist Angela Jackson and Australian Council of Social Service chief executive Cassandra Goldie.

It initially included a representative from the Business Council of Australia, but the lobby group’s chief executive, Bran Black, quit last year as it was too focused on welfare.

The committee’s report, released on Tuesday, referenced research claiming lifting JobSeeker to 90 per cent of the $1047-a-fortnight aged pension would see a return to society of $1.24 for every $1 invested.

“The research found that such an increase would create long-run benefits to Australia from a healthier and more ­productive workforce and decreased spending on government services worth $71.8m, estimated for a representative group of 20,000 Jobseeker recipients,” the report says.

It also recommended changing the indexation for JobSeeker – which has risen by 12 per cent to $778 a fortnight since 2023 – from being solely linked to inflation.

“Our analysis has once again concluded that indexing Jobseeker payment and related income supports only in line with the consumer price index has resulted in their relative base rates falling significantly below existing benchmarks such as the age pension,” the report says. “These payments continue to be seriously inadequate relative to all accepted poverty measures, creating sometimes severe hardship for our neediest citizens.”

Despite the Albanese government twice increasing commonwealth rent assistance, the committee is urging Labor to do the same again at the budget.

“More than 200,000 of the 1.35 million recipients of CRA in December 2024 were paying more than half their income in rent,” the report says. “Further increases are needed if the situation is not to deteriorate again, especially in the current, difficult housing market.”

It also has recommendations to improve accessibility to childcare and employment services.

While not committing to implementing any of the recommendations, Dr Chalmers used the release of the report to claim Peter Dutton was a risk to the ­social safety net.

“Under Labor, inflation is coming down, interest rates are coming down and real wages, jobs and living standards are going up,” he said in a joint statement with Social Services Minister Amanda Rishworth.

“The biggest risk to Australians on low and fixed incomes is Peter Dutton. He describes the indexation of pensions and payments as wasteful spending.”