oneworldtalk

The unemployment payments must come from somewhere. The best way is to spur economic growth to spread the wealth. The legacy of recycling limited resources often to those who are not in need of support is unsustainable. The higher income earners would benefit more from tax reforms while the dole should go to the lower income households or those who have lost their main source of income. To ensure that unemployment benefits is not abused, the government should step up efforts to retrain workers, upgrade skills for economic restructuring and offer more employment assistance to job seekers.

The middle-class in crisis

Where Labor's heart lies will be revealed in how it responds to a new breed of battler, writes Kerry-Anne Walsh.

Grainy black-and-white photos of black-suited men lining up at soup kitchens is an enduring image of the Great Depression of the 1930s.

Those desperate times are unlikely to be revisited in Australia but the medium- to long-term future for low- and middle-income earners who lose their jobs in the looming recession could be grim.

People who not so long ago would reasonably have been considered economically safe are now in the at-risk category.

They're the battlers who found a hero in John Howard and who subsequently became part of the ill-defined working family demographic championed by Kevin Rudd.

With unemployment rising, perhaps at a greater pace and with more severity than the Government is predicting, the mums and dads crowding welfare and Centrelink shopfronts could be the new faces of the 1930s soup kitchen.

Six months ago, after the contagion of the US-inspired credit crunch had spread to Australian shores, welfare bodies started stretching their services to people who had not before sought help.

Middle-class wage earners facing severe financial stress because of the increased cost of day-to-day living on rent, food, utilities, medical fees and child care were becoming welfare sector clients. It was a disturbing new phenomenon.

Interest rate drops have delivered relief to home owners, but it doesn't really matter the size of the mortgage if the main breadwinner in a financially stressed family doesn't have a job to meet repayments.

Rather than being a stop-gap payment, the unemployment benefit could become semi-permanent for many. The challenge for the budget, then, as many welfare bodies and concerned Government insiders see it, is to make the payment, one that at the very least doesn't condemn the recipient and his or her family to certain poverty.

The Greens and the independent senator Nick Xenophon are champions of the need to increase the unemployment benefit. Greens leader Bob Brown flexed his muscle when negotiating over the recent $42 billion stimulus package, securing an increase in the liquid assets test - the level below which a person's savings must drop before being eligible for unemployment benefits - from $2500 to $5000.

There has been little focus on the disparity in support payments to the jobless compared with other payments, despite the alarming growth in unemployment as the recession bites and the dangers of a large pool of long-term unemployed looms.

The attention has been gobbled up by pensioners. There is no doubt that single pensioners do it tough on $569.80 a fortnight but partnered pensioners receive a maximum of $951.80, which meets international standards as a liveable amount.

The fat in the system comes from the eligibility criteria, which can see couples with a private income of more than $60,000 a year receive a partial age pension.

And with that part-pension, no matter how humble, comes a host of other financial benefits and discounts.

The middle-class welfare state careered out of control under the previous Coalition government, particularly in its last three budgets when there was barely a person earning under $150,000 who didn't receive something. Some families who could well afford not to be subsidised, received benefits. It was vote-buying gone bonkers.

Saddled with the system, Labor tinkered around the edges in its first budget last year - means testing the baby bonus, for instance - but didn't show any political grunt to go further, with no particular financial pressure bearing down on Australia.

Matters are now vastly different. From a projected $22 billion surplus last year, forecasts have progressively gone south, money has been hurled out of government coffers in a desperate bid to sandbag Australia from the recession. The deficit could come in north of $50 billion.

The Prime Minister has suggested in vague terms that in this budget the well-off will be called upon to contribute more.

The socialist aim of using policy to redistribute wealth may be long gone from Labor's philosophical approach. Yet while modern politics seems often more about the pursuit and maintenance of power, there may yet be in Labor's cabinet a few beating "bleeding hearts" who will seize the opportunity of the recession to strip unnecessary handouts to the well-off and zero in on those who will most need it in the troubling times ahead. We'll see where Labor's heart lies on May 12.

http://www.smh.com.au/opinion/the-middl ... -aqz9.html