The Federal Government has announced tax cuts for workers and a cash boost for some pensioners, but concerns have been raised that one large group of Australians is being ignored.

Key points: The Government is hopeful recent tax cuts and a deeming rate reduction will see Australians spending extra money

The Government is hopeful recent tax cuts and a deeming rate reduction will see Australians spending extra money Advocates and economists want an increase to Newstart for a similar reason

Advocates and economists want an increase to Newstart for a similar reason Josh Frydenberg recently ruled out increasing the allowance

The Council on the Ageing (COTA) successfully campaigned for a reduction in deeming rates to help older Australians, and now its chief executive, Ian Yates, wants the Government to focus on the unemployed.

"Newstart is very much in our sights and has been for a long time," he said.

A single person on Newstart can receive up to $555 a fortnight, and COTA is one of dozens of organisations lobbying for the payment to be increased by $75 a week.

The Federal Government has repeatedly said it will not change the rate, and in a recent interview on 7.30 Treasurer Josh Frydenberg outlined why.

"We're not changing Newstart and the reason why is Newstart recipients, 99 per cent of [them] receive other benefits, so it might be a parenting benefit or another benefit," he said.

"The other thing about Newstart is two-thirds of the people on Newstart move on to a job within 12 months."

Mr Yates said the Government needed to take a closer look at the people relying on Newstart and what they were sacrificing to get by.

"Just blanket saying no on the basis that it is a short-term benefit is flying in the face of reality when people over the aged of 50, and particularly over the age of 60, are regularly staying on it for many years," he said.

"It is very difficult to live on Newstart, so for older unemployed people they run down their assets and they make decisions in terms of what they eat, medicines that they might have … that again is counterproductive because that ends up costing the Government more in the health system."

Economist Nicki Hutley, a partner at Deloitte Access Economics, said the allowance was not keeping in line with expectations.

"Their standard of living relative to others has declined by some 40 per cent over the last 25 years because they are indexed to the CPI, not to wages," she said.

"So even relative to pensioners, they are far worse off."

Change 'the right thing' for people in need

The federal electorate of Fowler, in Sydney's west, is home to some of the poorest Australians.

Local member Chris Hayes said he was all too aware of the financial pressures facing not just his constituents but many people across the country.

"We are seeing the rise of poverty in our nation, in a first-world nation such as Australia, which is something [that] should be shameful for all of us," he told AM.

Labor promised a review into Newstart if it won the federal election, but Mr Hayes said his party should have offered more.

"Most of us understood the level of Newstart was inadequate prior to the last election. I don't need a review to tell me that now," he said.

"It probably would have been better for us to actually have moved and made a decision earlier as opposed to putting it off.

"This is not about winning votes. I think this is about doing the right thing for people in need."

He wants politicians to show "some compassion" and lift the rate, or to risk entrenching further poverty.

"If they can't afford to get their hair cut, if they can't afford to get their teeth fixed, if they can't afford to do all these other things as well as get themselves to an interview, it's certainly not helping people at this level to be gainfully employed," Mr Hayes said.

More money in the pockets of Australians

The Government is hopeful the recent tax cuts and the reduction in deeming rates will result in Australians spending the extra money, but Ms Hutley is not convinced.

"Household debt is at extremely high levels, and it is one of the reasons we are worried that when people get tax cuts that they are more likely to save it than spend it to pay down that level of debt, particularly when consumer confidence is very low," she said.

ACOSS commissioned Deloitte Access Economics to look at the effects of raising Newstart last year and found it would create more jobs and even lift wages.

Some business groups have joined charities and welfare advocates in campaigning for a lift to unemployment benefits.

While the Government does not look like budging, Ms Hutley said it might have to change its position.

"If the economy slows, we are looking at GDP growth of just 1.4 per cent in annual terms when the next number comes out shortly, so there might be a bit of pressure then to add a bit more stimulus to the economy," she said.

"Raising Newstart has the dual benefit of helping those most in need while actually creating jobs and growth in those areas that suffer most disadvantage."