Labor should use its ‘power for the people’ and lift jobseeker, former RBA governor says

The Albanese government "needs to start using its power for the people like it promised it would," a former RBA governor has said, as he joined calls for a lift to the jobseeker rate.

Bernie Fraser, who was tasked with guiding Australia's monetary policy through 18% interest rates and "the recession we had to have", said the unemployment payment was one of the "many areas desperately needing attention" in the coming budget.

His voice joins the chorus of people - including Labor backbenchers - to publicly demand the government do more to raise the jobseeker rate, which has condemned recipients to poverty.

The government is also facing an internal battle, with MPs demanding the cabinet react to the increasingly loud calls.

Fraser said it was the duty of the government to act in the best interests of its people and during this time of record low unemployment, it had a chance to change some people's lives for the better.

"I am supportive of an increase in the jobseeker allowance - it is not only necessary but timely," he said.

"By providing extra support, it might help enable people to get a good-paying job to change their circumstances."