Treasurer Josh Frydenberg has made a surprise pledge that Newstart recipients will receive the $75 energy supplement – less than 24 hours after the federal budget excluded the unemployed from the payment.
Mr Frydenberg told ABC radio on Wednesday morning that the one-off payment would now include Newstart recipients.
“That’s new,” he said.
“The energy supplement will be extended to people on Newstart.”
The changes will deliver an $80 million one-off hit to the budget. The budget papers stated the energy scheme would cost $280 million but the changes the government has said it will legislate will push that to $360 million.
“Last night, the Prime Minister, the Finance Minister and myself discussed the issue and we thought that it was appropriate to extend it,” Mr Frydenberg said.
“It’s going to cost an extra $80 million because this payment will be for the 2018-2019 year. It doesn’t affect the surplus numbers for 2019-2020. It’s a prudent decision.”
But Opposition Leader Bill Shorten accused the government of playing catch-up with Labor’s own planned amendments.
“I don’t know if the government heard we were proposing an amendment today to make sure Newstart recipients were included,” Mr Shorten said.
“[It] wouldn’t be the first time the government has attempted to head off a bushfire.”
Pressure continues to build on both sides of politics to consider increasing Newstart itself. The payment to the jobless has not increased in 25 years.
But even Labor is not guaranteeing a rise, instead pledging to review the $40-a-day allowance if it wins the federal election.
Former Liberal prime minister John Howard also called for Newstart to be lifted last year.
“I think there is an argument about that,” he said at PricewaterhouseCoopers’ 2018 post-budget breakfast.
“I was in favour of freezing that when it happened, but I think the freeze has probably gone on too long.”
Liberal senator Arthur Sinodinos broke ranks with the government on the ABC’s Q&A this week, adding his support to calls for higher payments.
The Business Council of Australia’s Jennifer Westacott is also among those calling a rise.
But she criticised Labor for its plan to retain the deficit levy tax hit on high-income earners, a strategy she said would be difficult to sustain with a surplus forecast for 2019-2020.
“It’s hard to keep the deficit levy when you are in surplus,” Ms Westacott said.
Mr Shorten accused the government of banking a surplus off the back of underspending on help for the disabled under the National Disability Insurance Scheme.
He hinted that health and hospital spending will be the centrepiece of Labor’s budget reply speech on Thursday.
Opposition sources also argue they effectively have an extra $5 billion in the kitty for new spending or to deliver a bigger budget surplus – because the Coalition has embraced Labor’s tax cuts for low and middle-income earners.
Labor had already made its budget costings on the basis of those tax cuts.