ACT chief minister Andrew Barr has broken ranks with federal Labor to urge an increase to Newstart, arguing the dole traps people in a vicious cycle of disadvantage.
While federal Labor leader Bill Shorten favours a review of the current rate, Mr Barr used Tuesday's ACT budget speech to call for immediate action.
He said it was a "glaring omission" from last month's federal budget.
"At just $273 a week - some $400 less than the national minimum wage - the current rate of Newstart is too low to help people get back on their feet when they end up out of work," the chief minister told the Legislative Assembly.
"Instead, it simply traps them in disadvantage."
Mr Barr's plea to the federal government comes as he returned the territory's books to the black, with a $36.4 million surplus.
His government will also introduce a 15 per cent point-of-consumption gambling tax, which applies to all bets including sport and horse, harness and greyhound racing.
That takes in Australia's biggest sports like AFL, NRL, cricket and soccer, as well as other bets, such as those on the federal election or Academy Awards.
The ACT has set the same rate as South Australia, which was the first state to bring in the tax last year, while Queensland is expected to follow suit in its budget next week.
From July next year, stamp duty will be abolished for first home buyers in the ACT for those on incomes of less than $160,000.
Alongside that, grants for first home owners will be scrapped, with the government arguing they have not been effective in helping people enter the housing market.
The budget papers warn high levels of Australia's household debt and the federal government's decentralisation agenda continue to pose risks to the territory's finances.
Among the budget's other highlights, 50 electric car charging stations will be built across Canberra.
Planning to enable Canberra residents and visitors to the national capital to use light rail to access popular sights such as the National Gallery of Australia will be also be funded.
The first stage of the ACT's light rail service from the northern Gungahlin area to the CBD is on track to be completed in December.
