Federal Treasurer Jim Chalmers has refused to rule out the Coalition's proposal to increase the JobSeeker income free threshold, but Social Services Minister Amanda Rishworth has dismissed it as a "thought bubble with no substantive analysis behind it".
Opposition Leader Peter Dutton used his budget reply speech to call for JobSeeker recipients to be able to work and earn more before their payments are reduced, and suggested it would be a strong incentive to get people into work.
Ms Rishworth argued the proposal could have "unintended consequences" and told Sky News it had not been thoroughly costed or considered.
"What the opposition leader hasn't done is actually demonstrate how this will actually lead people to get off the safety net and into a full-time job," Ms Rishworth said.
"I would say that this is a thought bubble by Peter Dutton and what we don't know is how this will actually encourage workforce participation.
"He's provided no evidence to suggest that this would alleviate barriers that many people on jobseeker have in gaining employment."
Ms Rishworth has disputed Mr Dutton's projections that the policy would cost $700 million and suggested his proposal would be a significant burden on the taxpayer.
Treasurer doesn't rule out Dutton's proposal
Mr Chalmers told the ABC's Insiders program the government is always looking at ways to help people enter the workforce and signalled the government would consider proposals as part of an employment white paper due to be released later this year.
"Getting more people into work was already a central feature of our economic plan before Peter Dutton started scratching around for something to say in budget week," Mr Chalmers said.
"We're looking at the workforce more broadly in the context of the employment white paper and all the policies we have already put in place so people can work more and earn more and provide for their loved ones."
Last week, Assistant Treasurer Stephen Jones said the government would not rule out "good ideas to see more Australians in the workforce" and increase participation.
Opposition treasury spokesman Angus Taylor defended the proposal as "common sense" and argued it will help more Australians get into the workforce.
Mr Taylor told Sky News Labor needed to put away their "ideological prejudices".
"Here is a way to say to people, instead of losing 50 cents in the dollar, when you take on work, you don't lose 50 cents in the dollar — if anyone can tell me that's not going to be an incentive to get into work."
The federal government committed in the budget to lifting the base rate of JobSeeker by $40 per fortnight — or $2.80 a day — and extending eligibility for a higher rate to people over 55.
The lift has been criticised by advocates for being insufficient, saying it will fail to lift recipients out of poverty.
Mr Dutton has withheld support for the government's plan to increase welfare payments, despite advocates labelling it as a main barrier to people working more.
