Treasurer Jim Chalmers urged to ‘substantially’ raise JobSeeker rate by Government’s own economic panel

Labor is set to resist pressure to commit to a “substantial” increase to JobSeeker ahead of next month’s Federal Budget, rejecting its own economic advisory panel as it pursues a second straight surplus.

The Federal Government is expected to rebuff the Economic Inclusion Advisory Committee’s push to boost the welfare payment to 90 per cent of the aged pension.

The proposal was among 22 recommendations presented to Treasurer Jim Chalmers and Social Services Minister Amanda Rishworth in the committee’s annual pre-budget report.

As it did last year, the panel – chaired by former Labor families minister Jenny Macklin – is urging the Government to commit to “substantially increase” Jobseeker and related working age payments, as well as fix “unsatisfactory” indexation arrangements.

The committee’s report, published on Friday, said despite the $40-per-fortnight boost in last year’s Federal Budget recipients “regularly go without life’s essentials because they simply can’t afford them”.

It has again suggested raising the base rate to 90 per cent of the aged pension, which would lift it from $762 to $1004 per fortnight for singles.

The committee rejected the argument that raising the rate would be a major disincentive to employment, pointing to research suggesting it could help jobseekers find a job.

Dr Chalmers and Ms Rishworth welcomed the committee’s report but warned the Government “can’t fund every good idea and everything we’d like to do”.

The treasurer is tightening the purse strings as he strives for a second consecutive budget surplus, which he believes is critical to taming inflation.

In a clear attempt to downplay expectations of any substantial welfare boost in the budget, the Government released a separate report on Friday detailing the steps it was already taking to help low-income earners and tackle disadvantage.

The list included increases to JobSeeker and Commonwealth Rent Assistance and expansion of the single parenting payment, which amounted to a permanent $2.5 billion-a-year boost to the social safety net.

“We will always do what we can for people where it is responsible and affordable, and weighed up against other priorities and fiscal challenges,” Dr Chalmers and Ms Rishworth said in a statement.

Australian Council of Social Service chief executive Cassandra Goldie – who sits on the committee – said the Government must accept the recommendation so JobSeeker and Youth Allowance recipients “can live with dignity”.

“People receiving these payments are eating one meal a day, skipping essential medication and foregoing cooling or heating in a desperate bid to keep a roof over their heads,” Dr Goldie said.

The report also recommends an increase to rent assistance for a second year in a row and a “full-scale” redesign of the employment services system for jobseekers.

It again urges the Federal Government to axe the activity test for the childcare subsidy and guarantee at least three days of early childhood education for all children.

The committee is also pushing for a shift in attitudes toward the social security system, encouraging the Federal Government to wipe references to words like “dole” and “welfare” from legislation.