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JobSeeker payment set to be increased as Federal Government grapples with high unemployment

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The Federal Government is poised to increase the unemployment benefit, recognising that the jobless rate is likely to remain uncomfortably high for quite some time due to the ongoing impact of coronavirus restrictions.

The Coalition has long resisted increasing the $40-a-day unemployment payment — previously called Newstart — which would make any increase a significant shift in policy.

But the ABC understands Treasurer Josh Frydenberg will confirm the move in July’s mini-budget, when he will outline the next phase of the Government’s economic response to the COVID-19 crisis.

At the height of the crisis, the JobSeeker Allowance was effectively doubled to $1,100 a fortnight as part of the emergency response but that is set to revert to its old level of about $560 a fortnight for singles in September.

Sources have told the ABC that the payment is unlikely to return to pre-COVID levels and will be increased.

But it is unclear whether the rate itself will rise or whether a new supplement will be added onto it.

It comes as the latest jobs data from the Australian Bureau of Statistics revealed a further rise in the unemployment rate, up to 7.1 per cent.

While refusing to comment on the speculation, Prime Minister Scott Morrison emphasised the importance of the JobSeeker Allowance on Thursday in helping Australians get back into work.

“JobSeeker is the place where, if you have lost your job, JobSeeker is the place where you can connect to other employment services, to training opportunities,” he said.

The discussion about the future of JobSeeker comes as Treasury conducts a review of the $70 billion JobKeeper wage subsidy scheme, which is also set to expire in September.

The ABC understands Mr Morrison is not in favour of extending that scheme, instead preferring to “transition” workers who lose their jobs onto the JobSeeker program.

“We put our supports in place, income supports, JobKeeper and JobSeeker, and we put that in for six months so we would have that time to properly move for the next step, to change gears again,” he said.

“Because anyone who can tell you that they know exactly what is going to happen in September, in this COVID crisis, is having a loan of you.”

The Government will wait for the Treasury review before making any final decisions about the two schemes.

Coalition has resisted increasing JobSeeker payment for years

A broad coalition of business and community groups, as well as the Greens, have spent years campaigning for an increase to the $40-a-day JobSeeker Allowance, arguing it had not risen, in real terms, in more than 20 years.

Labor has also backed calls to raise the rate with Shadow Treasurer Jim Chalmers labelling it “inadequate”.

“We have been saying for some months, that the old Newstart rate of $40 a day is not enough for people to support themselves and to look for work,” he said.

“It would be good for the economy and good for vulnerable Australians if the Government announced a permanent JobSeeker rate which is higher than the old Newstart rate.”

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