Peter Dutton threshold ‘to push 50,000 back on welfare’

More than 50,000 would be pushed back on to welfare support payments at a cost of $400m over four years under Peter Dutton’s plan, government analysis finds.

Opposition Leader Peter Dutton. Picture: NCA NewsWire / Martin Ollman

More than 50,000 Australians would be pushed back on to welfare support payments at a direct cost of $400m over four years under Peter Dutton’s plan to raise the income-free area for JobSeeker recipients, according to new government analysis.

The Australian can reveal the government will use the new data to drill holes in the Opposition Leader’s costings for his marquee policy unveiled in last week’s ­budget-reply speech. It shows more than 50,000 people who had moved off income support – including those on JobSeeker, Youth Allowance (Other) and other payments – would return and swell dole recipient numbers above March levels of about 921,000.

Under Mr Dutton’s proposal allowing welfare recipients to supplement their payments by working more, the income-free area for JobSeeker recipients would be doubled from $150 to $300 per fortnight.

The cost of supporting more than 50,000 people who would be eligible to move back on to income support payments under Mr Dutton’s higher threshold is estimated at $400m over the forward estimates.

In recent days, the Coalition has briefed-out two competing costings for its policy – $700m and “in the order of” $2.3bn. The government analysis suggests that $700m is too low and $2.3bn is too high, with the actual cost somewhere in the middle.

The government is concerned that with about 75 per cent of JobSeeker recipients not currently declaring additional income, increasing the earnings threshold would trigger a dramatic spike in Australians falling back on to unemployed welfare benefits.

As Jim Chalmers and Social Services Minister Amanda Rishworth on Tuesday attacked Mr Dutton’s proposal, the Liberal leader said the cost of his policy was less than the government’s $4.6bn hike in JobSeeker payments.

Speaking on ABC Radio, Mr Dutton said he was firming up his costings with the Parliamentary Budget Office, but suggested the proposal could cost up to $2.3bn. He declared it was “in the order of about half of what the government is proposing to spend”.

Mr Dutton said the Coalition proposal was more responsible than the Albanese govern­ment’s plan to increase the JobSeeker rate by $40 per fortnight because it would not have the same inflationary impact.

“Do you want to be pumping $4.6bn worth of money into the economy? That’s why I think some of the economists have pointed out that this is an inflationary budget and that interest rates will stay higher for longer,” Mr Dutton told the ABC.

Dr Chalmers on Tuesday said Mr Dutton’s inability to clearly explain the cost of his JobSeeker proposal was an “absolute shambles”.

“I listened to Peter Dutton and his policy fall apart on radio this morning. He announced a policy last week. A week later he can’t tell the Australian people how much it costs,” the Treasurer said.

“He says it’s about an extra couple of billion dollars, but he’s not sure. And at a time when his main critique of the budget is that it spends too much, he’s saying that he wants to add another couple of billion dollars of spending. And he says he’s still trying to work it out.

“This is the kind of shambles that you see when an Opposition Leader is scratching around for something to say in budget week.”

Ms Rishworth said the ­Coalition was “actually saying no to Labor’s proposal to increase the base rate of JobSeeker”.

“He hasn’t come out and supported that and when we’ve put together a cost-of-living package, we’ve been very thoughtful about the extra support people need,” she told the ABC.

“Seventy-five per cent of people do not use the income-free threshold that’s currently available because they face a range of different barriers – age discrimination, disability discrimination and indeed, many don’t have, for example, the foundation skills required to be able to get a job. We need to support people to get the skills they need and support them, actually move off JobSeeker to get a meaningful job in the workplace. That’s what our focus is on.”

During the pandemic the ­Coalition doubled the income-free area before lowering it to $150 in 2021.