The Federal government will eventually need to increase the Newstart allowance to boost wages and a sluggish economy, WA Treasurer Ben Wyatt has predicted.

Speaking at a Committee for Economic Development of Australia breakfast on Friday, Mr Wyatt said a Newstart allowance bump was an obvious economic lever the federal government could pull to combat issues in the economy.

West Australian Treasurer Ben Wyatt. Credit:AAP

Federal Treasurer Josh Frydenburg and Prime Minister Scott Morrison have resisted a growing chorus of calls for an increase, arguing 99 per cent of recipients get other support payments.

The $278 weekly Newstart payment was granted to 426,000 Australians in the 2018-19 financial year but has only increased by $139 since it was introduced in July 1991.