But sources said Mr Fletcher demanded to review the recommendations before they were publicly released in April and is understood to have told the committee chair – veteran Liberal MP Russell Broadbent – that the final report could not contain the specific Newstart recommendation.
The committee, which included Liberal MPs Kevin Andrews, Bert van Manen, Ben Morton and Rowan Ramsey, as well as Labor MPs Ged Kearney and Sharon Bird, was then hastily reconvened to change the wording of the report.
The opposition’s policy at the time was to merely review Newstart rather than raise it.
Following Mr Fletcher’s intervention, MPs agreed to only recommend an examination of the “adequacy of payments on young people and single parent families”.
In a sign of the growing sensitivity of the issue, Mr Morrison on Tuesday warned Coalition MPs against airing personal views, telling them “government is not a blank cheque” and that they disrespected colleagues by pursuing personal policy agendas.
Mr Broadbent would not confirm that Mr Fletcher had requested the report be altered, only saying he “had many conversations with many colleagues”.
Ms Kearney, the deputy chair, and other MPs on the committee said they could not comment due to parliamentary protocols. But one said that “something was clearly up”.
“We assumed we had it rubber stamped by all and then out of the blue we had to change it,” the MP said.
Asked about the change between the draft report and final report, a government spokesperson said: “All committees make recommendations independently and are signed off by all members.”
Mr Fletcher, who is now the Communications Minister, did not answer questions over his role in the final report and directed queries to the office of his successor in the social services portfolio, Anne Ruston.
The Prime Minister remains adamant there will be no above-inflation increase to the unemployment benefit, which Treasury estimates would cost the budget $12.5 billion over four years and $39 billion over a decade based on a $75-a-week increase.
Among those to back an increase are former prime minister John Howard, Reserve Bank governor Philip Lowe, Business Council of Australia chief executive Jennifer Westacott, the Australian Council of Trade Unions, the Greens, the welfare lobby and National Seniors Australia.
The Labor caucus on Tuesday endorsed a new policy on Newstart that calls for an increase in unemployment benefits and an immediate inquiry to consider the new rate.
It did not decide the size of the funding increase and will refer the issue to the Senate economics committee.
The outcome means Labor will vote against a Greens bill to increase the payment by $150 a fortnight on the grounds that the review should come first to decide the appropriate rate.
A Labor caucus spokesman said the new position was to call on the government to “review and increase” the rate of Newstart.
Deputy Prime Minister Michael McCormack said the government had no plans to increase the payment, suggesting unemployed people should be willing to move regional towns to find work.
Many within the Nationals party room, who represent some of the poorest electorates in the country, agree the rate should be lifted but are divided over how it should be achieved.
Rob Harris is the National Affairs Editor for The Sydney Morning Herald and The Age, based at Parliament House in Canberra