Treasurer Jim Chalmers
Treasurer Jim Chalmers (Image: AAP/Jono Searle)

Budget leaks are common enough a week out from the big night in Canberra. But they are generally damp squibs, either controlled drops or minor revelations that don’t tell us anything that interesting.

But the big story this year is different. The scoop (if that’s what it is) from the Seven Network’s Mark Riley that Labor plans to increase the rate of JobSeeker for older recipients has had a significant impact on the political debate. Welfare activists are aghast. Backbench MPs are rushing to background Guardian Australia journalists. Treasurer Jim Chalmers is being forced to hose it down. 

One reason Riley’s leak appears to have gained traction is that it appears so plausible. A carve-out for older jobseekers reeks of focus group politics. It also appears to confirm some of the government’s previous backgrounding. Over-55s on JobSeeker already have slightly relaxed mutual obligation requirements, and over-60s in long-term unemployment receive a higher fortnightly payment. 

There’s no doubt Chalmers plans some sort of package to address the pressing cost-of-living crisis for poorer Australians. Broad hints have been dropped for months. He said yesterday: “There will be a cost of living package in the budget and it will prioritise the most vulnerable Australians.” Guardian Australia’s Canberra bureau reckons the over-55 increase is “part of a suite of poverty-reduction measures, including raising the children’s eligibility age for the single-parent payment to 14, and possible changes to rent assistance”.

But that’s unlikely to silence the debate on the adequacy of welfare benefits for the simple reason that Australia’s benefit payments are absurdly stingy. 

Australia has one of the lowest unemployment payments in the OECD. Everyone who takes even a cursory look at the problem agrees the rate has to be raised — including the government’s Economic Inclusion Committee, chaired by former deputy PM Jenny Macklin.

The committee’s report bluntly recommended a “substantial increase in the base rates of the JobSeeker payment”, as well as a boost to rent assistance. The release of the report added to the rising crescendo of public campaigning around welfare payments that has only been exacerbated by the cost-of-living crisis that is crippling low-income earners. 

The government didn’t want a public report into the adequacy of welfare payments — it was forced to accept one as the price of independent Senator David Pocock’s support for Labor’s cherished industrial relations reforms late last year. Perhaps predictably, the government has struggled to position itself on welfare policy ever since the committee’s report dropped.

The Albanese government is politically vulnerable on welfare policy because it strikes directly at Labor’s sensitive left flank. The Coalition didn’t have to pretend overly earnestly that it stood for the disadvantaged, but Albanese has made much of his upbringing by a single mother on benefits in public housing. And throughout 2020 and 2021, Labor MPs lined up to position themselves in favour of raising unemployment benefits and other government transfers.

Raising the rate debate clearly makes Labor uncomfortable. The Rudd and Gillard governments had a less-than-stellar track record in welfare policy, refusing to raise the unemployment benefit across six years in office. Most notoriously, under Julia Gillard, Labor tightened eligibility for the sole parent payment, plunging tens of thousands of single parents (mainly single mothers, of course) into poverty.

While Wayne Swan can rightly claim credit for lifting the rate of the aged pension as treasurer, he also raised the age of pension eligibility to 67, highlighting the problem of long-term unemployment for older Australians. 

Now that it is once again occupying the government benches, Labor has discovered that squaring the circle of fiscal responsibility and social need is rather more difficult than it might have hoped. Paradoxically, the billions of dollars of bonus revenue flowing into Treasury coffers from high commodity prices is making Labor’s protestations less rather than more convincing.

At a deeper level, the politics of welfare are so difficult for the modern Labor Party because it is so ambivalent about universal welfare provision.

Labor’s policy platform across nearly all portfolios is shot through with means tests and other forms of penny-pinching eligibility requirements. Mutual obligation is a policy first implemented under Paul Keating, before being ramped up by John Howard, and Labor has remained wedded to long-held beliefs around the need to “target” assistance to the most needy and deserving.

In this worldview, Laborist traditions of support for the working-class wage earner slide easily into incantations that “the best form of welfare is a job”. 

Both the economics and politics of welfare have shifted left since Labor was last in office, however. An unemployment rate below 4% undermines arguments about the supposedly unbearable cost to the taxpayer, while galloping consumer inflation makes the need for tight eligibility seem cruel. With job vacancies still plentiful and business crying out for more workers, it’s clear that many people who remain on long-term unemployment rolls face very significant barriers to work. 

And the electorate has moved on too. One fascinating aspect of the robodebt royal commission was how effectively it demolished the old mantras about dole bludgers and welfare rorters. The real cheaters, it turned out, were the highly paid bureaucrats in Services Australia. 

The droves of under-40s voters who delivered Labor government last year — in general by giving the ALP their second preference — are much more progressive than the Howard-voting generation of baby boomers they are replacing.

A policy calculated to reward (however slightly) older welfare recipients at the expense of younger ones simply adds to the generational rage that younger voters are feeling. Labor will ignore such sentiments at its own peril. 

Do you think it’s a bad thing to give older Australians — probably mostly women — a higher JobSeeker rate? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.