The government has confirmed that tonight's federal budget will include an increase to the JobSeeker base rate, rent assistance, Austudy and Youth Allowance.
Last month, Labor backbenchers and crossbenchers joined 300 signatories to an open letter addressed to the prime minister, urging him to raise welfare payments in the budget.
The letter was organised by The Australian Council of Social Services (ACOSS), which has been calling on the Albanese government to raise the JobSeeker rate to 90 per cent of the pension rate.
It currently sits at around $50 a day, while Youth Allowance is $40 a day.
The government has promised a $14.6 billion cost-of-living relief package, targeting "the most vulnerable Australians".
Federal Treasurer Jim Chalmers refused to confirm rumours last week that an increase to JobSeeker payments would be limited to those over the age of 55.
It is unclear whether the JobSeeker base rate increase announced today is across the board or will apply to certain groups.
Earlier today, Mr Chalmers said: "The cost-of-living relief in this budget is broader than what has been speculated on."
"It has a number of elements, it won't all be limited by age or by other distinctions," he said.
"There will be help for the most vulnerable, but also for middle Australia."
Around 5 million households and 1 million small businesses are set to receive up to $500 in energy bill subsidies. The energy bill support accounts for $1.5 billion of the $14.6 billion total.
Another $1.9 billion of the relief package was announced by the prime minister yesterday, to expand the eligibility for single Parent Payment recipients.
Over 57,000 families will benefit from the payments, which will not include parents whose youngest child is 14 years old, lifting it from the current 8-year-old cut-off.
This kind of government spending has elicited major criticism from the Liberal Party, which has raised inflation concerns.
Shadow Treasurer Angus Taylor said: "We don't want to see a budget that fails to deal with the inflationary pressures, the cost-of-living pressures that are bearing down on all Australians right now."
But the government has also confirmed its forecast for the 2023-24 Consumer Price Index, which measures inflation, will be lower than initially expected in the October 2022 budget.
The government argues that its cost-of-living relief measures will not add any further inflationary pressure to the economy and will directly reduce the CPI.
A Labor source has also confirmed the budget will feature new cost-of-living measures to be announced tonight, including an additional increase to rent assistance, which currently sits at $5 billion a year.
The program is capped at $78.5 per week and targets people already receiving welfare payments.
The Greens, crossbenchers and several interest groups have urged the federal government to intervene amid a worsening rental crisis.
Budget surplus expected
The federal budget will also forecast a small surplus of about $4 billion for this financial year.
If realised, it would be the first budget surplus in 15 years.
The dramatic turnaround from the $36.9 billion deficit projected in October has been driven by high commodity prices, a strong jobs market and a boost in net migration.
A year ago, the budget was forecasting a deficit of about $80 billion for the 2022-23 financial year.
Low unemployment and surging commodity prices are responsible for the return to surplus but the treasurer has repeatedly warned the budget remains in a structural deficit in future years.
"About a fifth of the upward revision to revenue comes from higher commodity prices — twice that, double that, comes from a much stronger labour market," Treasurer Jim Chalmers said.
"And the fact that after a decade of wage stagnation, we're seeing the welcome beginnings of wages growth."
Federal Shadow Treasurer Angus Taylor said Labor's budget surplus must be sustainable and not a one-off.
"We don't need to just see a budget surplus this year, a drover's dog could deliver a budget surplus this year," he said.
