Increasing the Newstart rate will not form part of the coronavirus stimulus package, but help for pensioners is on the table to help protect Australia from a recession.
Prime Minister Scott Morrison is finalising the economic package this week, after flying to Brisbane on Monday for the funeral of mother of three Hannah Clarke, who was murdered by her estranged husband.
The budget razor gang will meet to sign off on the measures, which are believed to be worth up to $10 billion.
But an announcement could be delayed until later in that week.
It will likely wipe out the projected surplus, unless revenue predictions increase or further savings measures are found.
It could include wage subsidies for industries hit hard by the virus and casual workers.
But Social Services Minister Anne Ruston warned any permanent increase to Newstart or dole payments was a “separate conversation” to the coronavirus economic response.
“As the Prime Minister has clearly said, the stimulus package he is looking to deliver to the Australian people is around a short-term, measured and proportionate response,” Senator Ruston said.
“Any long-term structural changes to anything we’re doing will be subject to a separate conversation.”
Labor’s health spokesman Chris Bowen said on Sunday that increasing Newstart should be considered particularly to help casual workers.
“We would support any sensible steps here to support casual workers,” Mr Bowen said on Sunday.
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One option on the agenda is an increase to the deeming rate, which determines how quickly retirees lose access to the full or part pension.
The deeming rate described how much interest the government expects or ‘deems’ pensioners to be earning despite the fact that the reality is they may be getting much less.
Interest rate cuts have sharpened the urgency on delivering a better deal for pensioners.
“I suppose it’s a tool that we give people to make their life easier when they’re on pension or payment and they’re receiving income from their financial assets,” Senator Ruston said.
“So whilst, as a secondary effect, I’m sure that any extra money in the pockets of any Australians is going to provide a stimulus, that’s not the underlying reason why we change deeming rates.”
National Seniors chief advocate Ian Henschke said when it comes to the government’s deeming rates “enough is enough”.
“We’re calling for immediate action to lower deeming rates,” Mr Henschke said.
“The top rate needs to be lower by at least 1.5 per cent and the lower by 0.5 per cent.
“As the cash rate has dropped, the higher deeming rate of 3 per cent on savings over $51,800 is now double the typical return on a term deposit.”