Scott Morrison pushes $50 a fortnight dole lift after JobSeeker ends

Scott Morrison will seek partyroom endorsement today for a ‘modest’ increase to the dole of up to $50 a fortnight.

Scott Morrison says ‘the Labor Party is having an each-way bet on pandemic politics.’ Picture: Getty Images

Scott Morrison will seek party room endorsement today on a proposal for a “modest” increase to the dole of up to $50 a fortnight in exchange for stricter mutual obligation conditions around a permanently higher Jobseeker payment once the $150 COVID-19 supplement ends next month.

The move will return the welfare payment back to its historical benchmark of around 40 per cent of the minimum wage after falling behind in the early 2000s.

The Australian has also been informed that a major reform package designed to jettison up to a dozen other welfare supplements has been shelved due to the long-term cost it would impose on the budget.

The proposed increase to the dole comes as the government starts the national rollout of the COVID-19 vaccine with 60,000 priority health care staff, quarantine workers and aged care residents across the country due to receive injections this week.

Following pressure from the welfare lobby, business groups, the Reserve Bank and amid growing support from within government ranks to extend pandemic payments for the jobless or permanently lift the base rate, cabinet was on Monday night preparing to sign off on the first real increase to the dole since the mid-90s.

The Australian understands that a meeting of the expenditure review committee last Friday ­decided to abandon a broadscale reform proposal streamlining the welfare system into a single, ­higher payment for unemployed Australians eligible to receive up to a dozen other supplements or subsidies.

The government has instead opted for an isolated permanent rise to the JobSeeker payment, which is currently set at $565 a fortnight for a single non-renter with no dependants.

To accompany the increase, a further tightening of the mutual-obligation conditions will also be introduced in what a senior government source described as a “carrot and stick” approach aimed at keeping the jobless out of poverty by getting them back into work.

The Prime Minister told parliament on Monday that the government was focused on “getting Australians back into work” and dismissed suggestions from Labor that his JobMaker hiring credit scheme allowed more experienced employees to be sacked and replaced with younger, cheaper workers.

“The Labor Party is having an each-way bet on pandemic politics,” Mr Morrison said

“They play it each and every day. They oppose it as much they support it. They oppose the measures that are getting Australians back to work, just as much ... as they support them. They cannot be relied upon to support the Australian people at their time of greatest need.”

A senior government source said the plan for a modest increase to the dole and stricter ­mutual-obligation conditions would be taken to the Coalition party room on Tuesday with a view to introducing legislation this week.

The Australian revealed last week that a major reform package had been taken to the ERC and had been widely supported. However, it is believed several cabinet ministers last week raised concerns that it would result in a higher cost to the budget and that it may not be able to be implemented in time before the temporary JobSeeker coronavirus supplement ends on March 31.

A senior government source told The Australian that, because only some JobSeeker recipients accessed many of the additional supplements, the cost of rolling them into one payment at their full value would have cost ­significantly more to the budget than a simple increase to the base rate.

Divisions also exist within ­Coalition ranks over a lift in JobSeeker payments. Some MPs argue that lifting the rate would provide further disincentives for people to get back in to work at a time when regional areas are struggling to fill job vacancies.

While mutual-obligation conditions require JobSeeker recipients to “accept any offer of suitable paid work”, MPs say this is rarely enforced and any ­measures to impose higher financial penalties or sanctions on those who breach the rules will be ineffective.

On Monday night, several senior ministers also expressed concern that the ERC had walked away from potential reforms that would have addressed the recommendations of the 2014 McClure report, which called for the overhaul of the welfare payment system by scrapping more than 20 supplements and replacing them with four new well-targeted payments.

The last real increase to the unemployment payment was in 1994 when it was increased by $2.95. The Australian Council of Social Services has been calling for a rise of $25 a day to the payment which sits at about $40 a day with chief executive Cassandra Goldie arguing that an ­increase of $25 a day would only “bring the payment only just above the poverty line”.

Speaking at the National Press Club in Canberra this month, RBA governor Phil Lowe said he was in favour of a rise in JobSeeker, not based on the potential economic impact of withdrawing support to the unemployed, but because it was “a fairness issue”.