Prime Minister Anthony Albanese’s government will deliver budgets that would make Scott Morrison proud if it continues to absorb the cost of American submarines and tax breaks for the wealthy without spending to reduce poverty, his old political nemesis warns.

Three weeks before the federal budget the government appears intent on declining advice to raise the rate of the JobSeeker allowance after 28 years’ stagnation.

“Labor is becoming a centre-right government, making economic decisions Scott Morrison would have been proud of,” said Adam Bandt, the leader of what Mr Albanese likes to call the Greens political party.

A new parliamentary budget committee this week called the payments “seriously inadequate”. But Mr Anthony Albanese said next month’s budget would be one marked by restraint.

A recent long-term poll showed reducing the poverty of people on income support payments is a rare example of a public policy idea that seriously gained public support over the past decade – though it remains backed by 40 per cent of Australians.

Existential dilemma

“The drama of choosing between Stage 3 tax cuts or poverty relief – (it is) existential for a Labor government,” said Marie Coleman,  a social policy expert who ran the Whitlam government’s national social welfare commission.

The budget impact of the government’s adoption of a bold AUKUS plan will be minimal over the next four years, or $9 billion, but will balloon to $368 billion and almost certainly beyond as Australia implements a forward-leaning defence policy.

A newly created budget committee on economic inclusion this week recommended a range of reforms aimed at reducing poverty, including lifting JobSeeker to 90 per cent of the value of the aged pension, or $957 a fortnight.

That change would cost about $6 billion a year but seems unlikely to be accepted by Treasurer Jim Chalmers, who has been depressing expectations and warning of a growth slowdown in the international economy.

The paper also calls for a range of other changes and a move towards running the economy in a way that would reduce the overall rate of unemployment.

Mr Chalmers might be more likely to consider some of its other more modest recommendations.

“There will be measures in the May budget to address disadvantage,” he said.

A single, childless person on the JobSeeker payment receives only about $49.50 a day, which the Parliament’s Economic Inclusion Advisory Committee said was among the lowest of any wealthy country.

‘Couldn’t live on it’

“Well, I couldn’t live on it,” Government Services Minister Bill Shorten said on Wednesday.

The former leader of the Liberal Party, Professor John Hewson said the government’s decision on whether to raise the rate of the payment above the poverty line would reflect on its values.

“(It) is shaping up as the acid test of their bona fides for fairness and empathy,” he said.

The budget committee on economic inclusion was intended to become a fixture in the lead-up to the federal budget and was negotiated as part of a deal over industrial reform reached with independent ACT Senator David Pocock last year.

“I’m very disappointed with the response,” Mr Pocock said.

Australian Council of Social Service chief executive Cassandra Goldie said the government had to act quickly.

“How could the government not act on this critical recommendation?” Dr Goldie asked.

“Here we are in 2023, we have the lowest unemployment payment amongst all of the wealthy countries in the world.”