Labor is urging the Coalition to boost the Newstart payment after the government bowed to public pressure to lift the income of almost 700,000 aged pensioners by changing the deeming rate.
Following the government’s announcement on Sunday to lower the deeming rates used to calculate pension income, the shadow treasurer, Jim Chalmers, said the Coalition needed to shift its focus to the “inadequate” Newstart benefit.
The call comes as the Australian Council of Social Service launches a “raise the rate” campaign to lobby MPs to immediately lift the single rate of Newstart, youth allowance and other related payments by at least $75 per week.
“The ball is in the government’s court, and we call on the government to take into account the well-founded and well-motivated concerns which have been raised by a number of groups now about Newstart and its inadequacy,” Chalmers said.
“We call on them to respond in good faith and in good time to these concerns, which have been rightly and understandably raised for some time now, including by the Labor party.”
While declining to nominate a dollar figure for the proposed increase, Chalmers said the government needed to take up Labor’s pre-election pledge for a review into the Newstart payment, given action was needed “right now”.
“Because there are such big dollars involved in any changes to Newstart, and because we’re talking about interactions with other payments in the social security system, and other programs provided by government, it’s important that you factor all of that in,” he said.
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“That task is best done by government. We had intended really by now to have a review up and running, which relied heavily on the agencies of government and other external bodies to make sure that we got it right.”
The treasurer, Josh Frydenberg, said the government was focused on helping people into jobs but acknowledged people were “doing it tough”.
“I am very conscious of the struggle that many people have when they are living off welfare,” Frydenberg said. “Our focus for the people on Newstart is helping to create the environment where they get a job, because that is the best thing you can do for someone who is on Newstart, helping them into the workforce.”
He said that more than 90% of people on Newstart received support from another benefit, such as a parenting payment or rent assistance, and two-thirds of people on the payment found a job within 12 months.
“People are doing it tough out there, and we are very conscious of that,” he said. “At the same time the focus for the government is on responsible economic management reducing their overall tax burden, creating jobs, rewarding effort and encouraging aspiration.”
The social services minister, Anne Ruston, said the government had no plans to boost the Newstart payment.
“You’ve probably heard it a million times and you’re going to hear it a million again – the best form of welfare is a job,” Ruston told Sky News.
The government’s resistance to lifting the Newstart payment comes after a Deloitte Access Economics report last year found a $75-a-week increase to Newstart would lead to a boost in consumer spending, and create more than 10,000 jobs.
The report said that increasing the incomes of more than 700,000 people by $10.71 a day would cost the federal budget $3.3bn a year.
Unlike the pension, the Newstart payment is linked to prices rather than wages and, since 1994, when the unemployment benefit was last increased in “real terms”, wages have grown 40% faster than prices.