An extra $2.86 a day for welfare recipients on the lowest unemployment payments in the developed world shows compassion and empathy, the treasurer says.

Responding to comments from shadow treasurer Angus Taylor the federal budget was divisive because working Australians will be "paying for others' handouts", Jim Chalmers said the country was better off without "downward envy".

"What worried him about our changes in social security was that it meant that the broader Australian community would be funding help for the most vulnerable," Dr Chalmers told the National Press Club.

"That is the whole basis of social security.

"I think there's a generosity inherent in the Australian character that says if you are doing it the toughest, you need the most help."

An extra $40 per fortnight was set aside for JobSeeker, Austudy and Youth Allowance payments in the budget.

Despite the rise, single JobSeeker recipients with no kids will still have to survive on $52.36 per day, well below the poverty line of $87.32.

The government will instead attempt to lift people out of poverty by increasing workforce participation, which it will seek to address with an employment white paper, due to be released in September.

"Even in a country that's got 3.5 per cent national unemployment, there are still pockets of our country ... where we just haven't been able to attach enough people to the opportunities that a growing job-creating economy can provide," Dr Chalmers said.

Australian Council of Social Service chief executive Cassandra Goldie says the increase to Centrelink payments fell well short of what is needed.

"It is certainly not enough for younger people who are facing extreme poverty and deprivation because of the inadequacy of these key income support payments," she said on Wednesday.

"Going into this budget we had an unemployment payment that was, shamefully, the lowest of all of the OECD countries, despite us being one of the wealthiest countries in the world."

The government lowered eligibility for the higher rate of JobSeeker payments from 60 to 55-year-olds, meaning 52,000 Australians between 55 and 59 will receive an extra $92.10 per fortnight.

While it is a welcome development for vulnerable older Australians, younger people feel they are being left behind.

National Union of Students president Bailey Riley says a 15 per cent increase to rent assistance is inadequate, as rising housing costs and HECS debts weigh especially hard on young people.

"Albanese promised us a better future for all, but young Australians are really asking now who is that better future for? Because it's definitely not for us," she said.

Other measures were better received, including a $3.5b commitment to fund bulk billing for children under 16 and concession card holders.

Single Mothers Association chief executive Terese Edwards says she can smile for the first time in more than a decade, after the government lifted the cut-off for single parent payments from when their child is eight years to 14.

She also lauded the government for scrapping the ParentsNext program.