Deloitte wants jobless benefit increase

Colin Brinsden, AAP Economics Correspondent

Welfare advocate ACOSS says an increase in unemployment benefits is the most effective way for the federal government to help those living in the worst poverty.

Avid budget watcher Chris Richardson says while he remains a strong supporter of budget repair, unemployment benefits have become "embarrassingly inadequate" as Newstart hasn't kept up with national living standards for more than a quarter of a century.

The economist from Deloitte Access Economics wants to see a $50 a week increase to these benefits and immediately index them to wages which he believes would be $3 billion well spent.

"Deloitte Access Economics is spot on to nominate the single standout fairness failure in Australia in 2018 to be the low level of income support payments for unemployed people and students," ACOSS chief Cassandra Goldie said in a statement.

"The single most effective way for the government to relieve the worst poverty is to raise the lowest social security payment."

In his Budget Monitor released on Monday ahead of the May 8 federal budget, Mr Richardson says the Turnbull government is enjoying the biggest surge in company tax revenue in 16 years.

While this will put the budget bottom line in much better shape in both this financial year and next, he warns it would be wrong for politicians to bank on such wealth beyond that.

As such, he reiterated his objection to the government announcing personal income tax cuts as widely expected next week.

"The oldest budgetary mistake in the book is to take better economic news and promise it away," he told AAP.

"We recommend just wait a bit and see the whites of the eyes of a couple of surpluses."

However, he expects Treasury will produce "even happier" budget numbers than his own because it tends to bake in for several years good or bad news at the time, allowing it to spend up to $8 billion per year on relatively solid personal tax cuts.

He says company tax revenue has gone from a "100-pound weakling to the Incredible Hulk" in a short period of time because the accumulated losses suffered by companies and superannuation funds during the 2008-2009 global financial crisis have finally worked their way through the system.

He said it means billions of dollars in additional revenue have allowed the government to ditch its planned increase in the Medicare levy while keeping the budget on track for a surplus by 2021, albeit likely now smaller at $3.7 billion than the $10.2 billion surplus predicted in December.



$16.6 billion deficit versus $23.6 billion deficit at time of December's mid-year budget review.


$13.3 billion deficit versus $20.5 billion deficit.


$5.3 billion deficit versus $2.6 billion deficit.


$3.8 billion surplus versus $10.2 billion surplus.