Two Liberal backbenchers have urged the Morrison government to increase the dole, backing calls from former prime minister John Howard and the Reserve Bank to raise the Newstart rate.
West Australian senator Dean Smith on Monday broke ranks with the government, which is refusing to heed growing calls to lift welfare payments for the unemployed.
"I am someone who believes the Newstart allowance amount must be more than reviewed - which was Labor's lame position - it should be increased," Senator Smith told the upper house.
He said Reserve Bank governor Philip Lowe and Liberal 'legend' Mr Howard had provided a "very powerful starting point" in the Newstart debate, which should weigh heavily on the coalition.
"I do think that these matters should be top of mind. They do deserve careful consideration," Senator Smith said.
The central bank governor has said raising Newstart would help stimulate the economy, while Mr Howard has stated the payment should no longer be frozen.
But Senator Smith described a Greens' push to legislate a $75 a week increase to the payment as a political stunt.
Greens senator Rachel Siewert's doomed private bill was debated for about an hour on Monday.
"Every vote for this bill is a vote for the unemployed, for those living in poverty, for members of our community doing it tough," she said.
Veteran Liberal MP Russell Broadbent backed Senator Smith.
"It is hard at that level of income, especially in regional areas, to have enough money to get out and find a job," he told ABC TV.
He said the government could find the money within existing resources.
"I have to question the job start agencies as to their effectiveness and would money be better spent directly with those who are unemployed, enabling them to get job opportunities."
Labor senator Pat Dodson said the situation would not change without the government supporting a Newstart increase.
"The rate of Newstart is obviously too low and the government needs to raise it. It's just not possible to live with dignity on $40 a day," he said.
Greens co-deputy leader Larissa Waters choked up while speaking about the opposition dismissing the bill.
"This is real people we're talking about and it's very disappointing ... that hope is given up too early," she told parliament.
Liberal senator Wendy Askew led the government's rebuttal of raising the dole, repeating its mantra that "the best form of welfare is a job".
"You can't just wave a magic wand and give welfare recipients a few more dollars and say you've fixed the so-called poverty trap," she said.
Earlier, One Nation leader Pauline Hanson became the latest in a long line of influential MPs demanding a boost to the rate.
"Yes, I do," Senator Hanson told reporters in Canberra on Monday, when asked if she wanted the Newstart allowance raised.
Nationals MP Barnaby Joyce last week called for Newstart, which hasn't increased beyond inflation since the mid-1990s, to be boosted in regional areas.
The payment is $555.70 a fortnight for a single person without children, leaving job-seekers with about $40 a day.
Australian Associated Press