NEWS

National News

No modelling done on Newstart: Treasury

No_modelling_done_on_Newstart_Treasury.jpg

Prime Minister Scott Morrison at Parliament House in Canberra, February, Thursday 13, 2020. (AAP Image/Mick Tsikas) 

The Morrison government appears to have ignored widespread calls for an increase to Newstart to both lift people out of poverty and stimulate the economy.

Department of Treasury officials were called before a Senate hearing into the adequacy of Newstart in Canberra on Friday.

Asked if Treasury has been requested by the government to do economic modelling on an increase to the benefit, its division head of macroeconomic conditions Trevor Power said: "No we haven't."

Neither had the department done any analysis on other modelling, such as from consultants Deloitte, which showed economic stimulus would result from raising Newstart.

Mr Power said that modelling did show people who receive Newstart tend to spend a lot of that money and that flows into the economy.

But he said it is important to understand the funds needed to raise Newstart would have to come through higher taxes, increasing debt or reducing spending in other places.

"Nothing comes for free," he said.

Newstart hasn't seen an increase for 25 years other than twice-yearly adjustments indexed to inflation.

The Morrison government has so far batted away calls for an increase to Newstart from welfare and business groups, economists, the Reserve Bank, federal Labor and the Greens.

© AAP 2020