Treasurer faces test on dole rate

An independent review into welfare set up by Labor in exchange for passing its IR law is likely to push Jim Chalmers to increase JobSeeker.

Welfare under Labor will be reviewed as a result of pushing through its industrial relations bill.

An independent review into welfare set up by Labor in exchange for passing its industrial relations law is likely to push Jim Chalmers to increase the JobSeeker rate in his May budget.

Multiple members of the economic inclusion advisory committee say the rate of welfare is too low and increasing JobSeeker payments was the focus of their first meeting in December.

Any findings in favour of giving welfare recipients more money each week will put pressure on the Treasurer’s attempts to tackle inflation and control government spending through the budget in four months.

The review group, chaired by former Labor minister Jenny Macklin, was created last year to secure the vote of independent senator David Pocock for workplace reforms, and is dominated by long-time advocates of higher dole payments, including the Brotherhood of St Laurence, academics and the Australian Council of Social Services.

Dr Chalmers would not rule out an increase to the welfare payment but said such reforms needed to be weighed against fiscal challenges facing the nation.

When asked whether he would raise the Jobseeker rate, he said: “Clearly we will do what we can when we can.

“As a Labor government, you would always like to do more, but we have to weigh that up against the fiscal and economic challenges as well.

“None of these proposals … come without a hefty price tag and my job is to make it all add up in the context of a trillion dollars of debt.”

Dr Chalmers said he had been working on Labor’s electricity bill relief with his state counterparts over the summer, which would be “meaningful” to all Australians’ budgets.

Members of the committee on Monday said the Jobseeker rate needed to be increased by as much as $25 a day.

A review group will recommend JobSeeker be increased by $25 per day.

Associate professor at the Australian National University’s College of Arts and Sciences Ben Phillips said jobseekers were on the payment for an increasingly long time, with the living standards of those relying on it ­“dramatically lower” than the rest of the population.

“The payment level itself is simply inadequate to provide an appropriate social support safety net,” Professor Phillips, a former economist for the Australian ­Bureau of Statistics and researcher at the National Centre for Social and Economic Modelling, told the Australian. “I think it is necessary to increase the payment – the argument is around how much.”

Professor Phillips said there were “broader structural” issues to be addressed, including whether some people on Jobseeker – such as older Australians not yet eligible for the Age Pension – should be supported by a different set of income supports.

“Increasingly, jobseekers are on that payment for a long time, often years, with successive governments tightening eligibility on the disability support payment … and the Age Pension kicking in later than it used to,” he said.

“The economic inclusion committee is taking a broad look at all welfare payments in Australia … but the first matter of business is the Jobseeker payment itself.”

Data from the Department of Social Services this year showed that women over the age of 50 were spending an average 242 weeks on unemployment benefits, up from 198 weeks in 2018.

ACOSS chief executive Cassandra Goldie said the government needed to “urgently” raise the rate to at least $73 a day.

“Even before the cost-of-living crisis, income support payments weren’t nearly enough to cover basic expenses,” she said.

“But in the last 12 months, rents have risen by 18 per cent and food by about 9 per cent … people on income supports are worst affected by these rising costs.

“We’re hearing from people who are forced to skip meals, ­deprive themselves of electricity and go without essential medications so they can afford rent.”

Swinburne University social sciences professor Kay Cook said it was “indefensible” a payment intended to ensure people didn’t fall into poverty was set below the poverty line.

“There is no moral justifi­cation for having an income safety net not saving you from anything,” she said.

“We found that when people received the coronavirus supplement and mutual obligations ceased, they were more able to do things and buy things needed to get them to employment, whether that was finishing the course they wanted to do or purchasing something to help them get to work.

“They were closer to employment when the government got out of their way.”

Opposition social services spokesman Michael Sukkar said Labor had “talked a big game” about JobSeeker in the lead-up to the election and now needed to “come clean” on whether it would follow through in the May budget.