The Australian government plans to increase income support welfare payments such as JobSeeker Payment, Austudy, and Youth Allowance by $40 per fortnight to keep up with inflation. These payments are indexed twice a year to maintain their real value. However, with the current consumer price index having increased by 7% over the last 12 months, the upcoming indexation rise of around 3.5% means that social security payments will rise by more than $40 as allocated in the budget. The government will also increase Commonwealth rent assistance by 15%.
While the budget focuses on increasing welfare payments, it has been criticized for not addressing structural reforms that can tackle the root causes of inflation. Economist Chris Richardson said the budget would make it difficult for the Reserve Bank of Australia to control inflation. Shadow Treasurer Angus Taylor also expressed concern about the government’s economic management approach, which he claimed would result in the Reserve Bank having the foot on the brake at the same time as the government has the foot on the accelerator. Treasurer Jim Chalmers defended the budget, suggesting that it is carefully calibrated to alleviate inflationary pressures, not add to them.