The Liberal MP Rowan Ramsey has proposed maintaining jobseeker at a level higher than $40 a day as an incentive for recipients to take up the cashless debit card. Ramsey’s call comes as the Coalition debates whether the coronavirus supplement, doubling jobseeker to $1,100 a fortnight, should continue past September, with Llew O’Brien warning he will argue for it to continue if unemployment persists in his electorate of Wide Bay. Ramsey says the debate about jobseeker (formerly Newstart) “is not going away” and he is “on record previously that Newstart is pretty low”. “I think there are other reforms we can make in the welfare sector that can make a difference – a lot of us are discussing ideas,” he said, citing simplification of the welfare system and amalgamation of payments. “I think there should be an incentive to get onto the cashless debit card.” Asked if this incentive could include a higher rate of jobseeker for those who signed up to the card, Ramsey confirmed this was “under discussion” and that “the old Newstart rate is pretty tough to get ready for work, on that allowance”. “The cashless debit card started in my electorate … and I think it should be rolled out wider. “It’s something that works and it would be suitable for a far bigger section of the population.” The social services minister, Anne Ruston, said “the government remains committed to the legislation currently before the parliament which extends the trials in the four current sites to June 30, 2021 and transfers those on income management in the NT and Cape York to the cashless debit card”. “The government has made no further decisions about the [cashless debit card].” The Liberal MP Llew O’Brien opposed the proposal though, arguing the reason for the cashless debit card was “to help people with income management issues such as drug addiction and gambling”. “The cashless debit card trial neighbours my electorate of Wide Bay,” he said. “As a former police officer who’s had a lot to do with people suffering from those addictions, I think a blanket a measure of putting everyone on a welfare income management without identifying people with actual problems is not the best way to go forward.” Wide Bay has suffered job losses of 8.6% since the coronavirus crisis, according to a Grattan Institute analysis. The resources minister, Keith Pitt, said the cashless debit card “has been broadly welcomed as it is by police, social service providers and welfare recipients”. “It is achieving what it is intended to do,” he said, declining to express a view about incentivising its uptake further. The Department of Social Services revealed last week that more than 1.6 million Australians are now on jobseeker, renewing debate about whether it is viable to cut the payment in September. Treasury is considering the quantum of jobseeker in discussion with DSS as part of its review of the jobkeeper wage subsidy. O’Brien told Guardian Australia he would argue for the continuation of the higher rate of jobseeker “if I’ve got an abnormally large number of people paying mortgages, who have to sustain a lifestyle and bills that aren’t sustainable on what was Newstart”. “Yes, I’ll be seeking to have it continued – how successful I’ll be, I don’t know. “If there are people here that need it – who have been seriously affected by coronavirus – I’ll be doing everything I can to ensure they don’t lose their homes, can pay their bills … and normal school trips for kids, to do what I can to keep them going.” The Liberal MP Andrew Wallace said he would support an increase in jobseeker only “if it could be shown that the old quantum [$40] impeded people’s ability to look for work”. “We need to take it back to $550 [a fortnight] … But we should look at tapering it rather than have it kick back to the old level in September.” The Nationals MP Anne Webster said she did “hear the odd story where employees refuse to come back to work because it’s easier to sit at home and take the $1,100 jobseeker payment”. “I think it’s a fine balance, it’s important that people who couldn’t get jobkeeper have been able to get by on the $1,100 a fortnight [jobseeker with coronavirus].” On Tuesday, the finance minister, Mathias Cormann, told the Covid-19 Senate committee that the coronavirus supplement “is a temporary payment”. “We are currently considering how to appropriately transition out of what is a temporary transitional payment,” he said. The Australian Unemployed Workers Union spokesman, Jeremy Poxon, said it “wholesale rejects any proposal to put even more Australians on the cashless debit card”. “It’s put people who are incredibly at risk even at more disadvantage,” he said, citing people unable to buy cheaper second-hand goods online on Gumtree or to allow kids to have cash to pay for excursions or use the school tuckshop. “We welcome the couple of Liberals who have broken ranks and called for a much-needed increase to jobseeker.”