The man responsible for federal government spending has acknowledged increasing the Newstart allowance would pump money straight back into the economy.
But as he looks for ways to boost retail spending and breathe life into the stagnant economy, Josh Frydenberg continues to dig in against widespread calls to lift the unemployment benefit.
"There is no doubt people who are on Newstart or other welfare payments are not saving it, they're actually spending it to get by day-to-day, that's absolutely right," he told ABC radio on Friday.
"But the most positive economic impact is actually by boosting productivity and creating more jobs, and moving those people from welfare to work."
Repeatedly challenged to increase the dole payment, which has barely budged in several decades, the treasurer insisted he cared deeply for people living on the poverty line.
"The point about getting people into jobs is actually about helping lift those people out of poverty, lifting them out of unemployment, and the record of our government is very strong in that regard," Mr Frydenberg said.
Australian Associated Press