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No Centrelink boost on the cards - this is why

·Personal Finance Editor
·3-min read
A Centrelink sign on the exterior of a building, Anthony Albanese and Scott Morrison
Both major political parties have said they will not support boosting Centrelink payments. (Source: Getty)

Neither the Coalition nor Labor have said they would boost Centrelink payments, despite the rising cost of living hitting Aussies hard.

Considering we are in the midst of an election campaign, where cost of living is at the forefront, some have been questioning why neither of the two major parties has committed to boosting the payments.

So, why is there no plan to boost payments and why should it be on the table?

Negative effects of boosting Centrelink

Recently, the Greens put forward a plan to boost Centrelink payments to $88 a day, bringing it closer in line with the minimum wage.

However, the Parliamentary Budget Office (PBO) questioned the effect of boosting Centrelink payments.

The PBO said boosting welfare payments could have the adverse effect of encouraging people not to work, if they could make the same money by staying at home.

"In extending the income-eligibility threshold, it is likely that some potential recipients near the income cut-off point may choose to either reduce their work hours or not undertake additional working hours that they otherwise would have," the PBO said in its costing letter to the Greens.

"The extent of this effect is highly uncertain and therefore has not been included in the estimated financial implications of this proposal."

Positive effects of boosting Centrelink

The decision of both major parties not to lift JobSeeker is “immoral” and has relegated millions of Australians to continuing to live under the poverty line, said the St Vincent de Paul Society.

National president Claire Victory said the decision was both cruel and unnecessary.

“It is crushingly disappointing that voters at this election will not be able to choose a party of government that wants to lift Australia's brutally low JobSeeker rate,” Victory said.

“It is simply immoral for a nation as wealthy as Australia to allow millions of people to languish beneath the poverty line.”

People queue up outside a Centrelink office in Melbourne on April 20, 2020, which delivers a range of government payments and services for retirees, the unemployed, families, carers and parents amongst others. - A report from the Grattan Institute predicts between 14 and 26 per cent of Australian workers could be out of work as a direct result of the coronavirus shutdown, and the crisis will have an enduring impact on jobs and the economy for years to come. (Photo by William WEST / AFP) (Photo by WILLIAM WEST/AFP via Getty Images)
Millions of Aussies are on Centrelink payments. (Source: Getty)

JobSeeker ‘designed to punish’

Victory disagreed with the assertion that lifting the JobSeeker rate would act as a disincentive to work.

“In my decades of engaging with people experiencing poverty, I'm yet to find anyone who's able to work but chooses to remain on JobSeeker,” she said.

“It’s clear that the current JobSeeker rate is actually designed to punish people.”

Victory said while it was understandable both parties were cautious about increasing national debt, there were ways to boost JobSeeker without impacting the budget bottom line.

Modelling by the ANU Centre for Social Research and Methods, commissioned by the St Vincent de Paul Society, found an increase to JobSeeker of $150 per fortnight, along with a 50 per cent increase to Commonwealth Rent Assistance, could be paid for through minor tax changes that would only marginally affect the highest income earners.

“This research shows there is no justification for being so brutal with people who cannot find sufficient work,” Victory said.

“There is abundant wealth in this country to fund an income increase to those who most desperately need it.”

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