The Morrison government is poised to abandon its long-held opposition to raising the unemployment benefit, as it seeks to deal with huge job losses due to the coronavirus.
The Coalition has long defied widespread calls – including from its own side of politics – to increase the $40-a-day unemployment payment, previously known as Newstart.
But the ABC is reporting that it understands Treasurer Josh Frydenberg will confirm the move in July’s mini-budget, when he will outline the next phase of the economic response to the COVID-19 crisis. If correct, it represents a significant shift in policy for the federal government.
In the early days of the coronavirus crisis, the JobSeeker allowance was effectively doubled to $1100 a fortnight. It is due to revert to its old level, of about $560 a fortnight for singles, in September.
But sources have told the ABC the payment is unlikely to return to pre-COVID levels and will be increased.
It comes as figures showed Australia’s unemployment rose to 7.1 per cent in May with another 227,000 people out of work. That came on the back of devastating figures for April – with both months taken together, 620,000 people have lost jobs since March.
The latest jobless figures are the worst since October 2001 and would be far grimmer were it not for another big fall in workforce participation.
On Thursday, Prime Minister Morrison described the figures as heartbreaking, but unsurprising.
“These are dark times,” he said.
He also warned more people would likely join unemployment queues in coming months.
The government is examining the best way to balance its JobKeeper wage subsidy, which is also legislated to finish in September, and the JobSeeker payment.
Earlier in the week, Industrial Relations Minister Christian Porter conceded it was inevitable people would move from the wage subsidy to unemployment payments.
Mr Morrison and Treasurer Josh Frydenberg rejected questions from Labor in parliament about how many more jobs would be lost once JobKeeper ends.
“The member’s question is presumptuous because he makes assumptions about government policy on decisions that have not been made,” the PM told parliament.
Earlier, he didn’t rule out an increase to the dole’s $40-a-day base rate.