27 January 2009

$2b welfare crisis looms

Welfare payouts are set to explode by up to $2 billion as the economic crisis pushes more people onto the dole.

Official forecasts say the Rudd Government faces a $1 billion blowout as unemployment moves up to 5.75 percent but analysis by the Herald Sun reveals that sum will double as the jobless rate hits 6.7 percent by the end of the year.

That translates into 250,000 jobs lost as Mr Rudd yesterday warned of a "rising tide of unemployment".

The finding comes as Labor's new job placement system — which softens penalties for those missing job interviews and gives priority to long-term unemployed over those newly sacked — comes into operation.

The system was developed when a booming economy was absorbing skilled workers and those considered job-ready will only get basic help for the first three months of unemployment.

Mutual obligation rules that enforce welfare payment restrictions for missing interviews or appointments will be lifted.

Welfare agencies are pushing for a $30-a-week NewStart boost to help workers who lose their jobs and will sit down with Deputy Prime Minister Julia Gillard today to discuss relief measures.

A report by Access Economics, commissioned by the Australian Council of Social Service, found welfare groups were forced to turn away 80,000 seeking help in 2007-08.

The report also found that unemployment will rise to 6.7 per cent in 2009-10, and 7 per cent in 2010-11.

ninemsn 27 Jan 2009


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