The JobSeeker unemployment payment (previously NewStart) was effectively doubled by a “coronavirus supplement” after the pandemic struck, taking the payment for a single person with no dependents from about $550 per fortnight – an amount which had not increased in real terms for 26 years – to $1100.

But the coronavirus supplement has been wound back, with the total fortnightly payment dropping to $815 in October, and to $715 on January 1.

The supplement is due to be axed entirely on March 31, meaning JobKeeper will return to the $40 a day level unless the Morrison Government decides to increase it.

Deloitte Access Economics has modelled a return to the old rate as costing the economy $31.3 billion and 145,000 full-time jobs over the next two years, because increased welfare payments are usually spent immediately on goods and services.

Dr Lowe said the central bank had not modelled the economic consequence of stripping away pandemic payments.

“But I think there is a wide consensus in the community that the previous level (of JobSeeker payments) should be increased permanently,” he told the National Press Club in Canberra on Wednesday.

“I’ve said on previous occasions that I would join that consensus.

“As a society, what level of support do we want to provide people who don’t have a job?

“Different people will legitimately have different views about the level of support. My own view is that some increase is justifiable.”

Prime Minister Scott Morrison said this week that the government was waiting for “more data” before making a decision on a permanent JobSeeker rate.

Dr Lowe said cutting the JobSeeker rate would have some effect on spending but it was mostly an issue of fairness.

“As a society, what level of support do we want to provide people who don’t have a job?” he said.

“Different people will legitimately have different views about the level of support. My own view is that some increase is justifiable.”

When asked in December about raising the JobSeeker rate, SA Senator and Social Services Minister Anne Ruston talked up the importance of getting a job.

Ruston said the Morrison Government will have spent $20b on the extra payments by the end of March.

“The government has twice extended the temporary coronavirus supplement, which will continue to be paid on top of the rate of JobSeeker through to the end of March as we support Australians through the pandemic,” she told The Advertiser.

“We know that getting a job is a real game changer in everyone’s life.

“As the economy reopens, the government is focused on supporting businesses to create those jobs through JobMaker and putting people on a pathway to those jobs through JobTrainer and intensive support for people with additional barriers.”

There were 912,000 people registered as unemployed in Australia in December, down from 942,000 in November.

Australian Council of Social Service chief executive Cassandra Goldie said the government did the right thing last year by increasing the payments which were previously below poverty level.

“The increased rate meant that people, including families, were able to afford their rent and still have enough left over for fresh fruit and vegetables, to visit the dentist or catch up on bills,” Dr Goldie said.

“With only one job for every nine people searching, the insecurity is wreaking havoc on people’s mental health and leaving them to face the heart-breaking decision of whether they’ll be able to afford to continue living in their home.”

Labor’s treasury spokesman Jim Chalmers said the reasons for a permanent increase were self-evident.

“It’s actually both a fairness issue – it’s about making sure people can support themselves while they look for work – but it is also an economic issue,” Dr Chalmers said on Thursday.

“There’s a lot of shops and small businesses which have done well from the fact people have had more spending power, and so I think it ticks many boxes at once.”

-with AAP