Economic crisis spawns depression booklet

The national depression initiative, Beyond Blue has released a booklet to help Australians cope with the global economic crisis.

Beyond Blue chairman, Jeff Kennett says many families will find themselves in financial hardship over the next 18 months.

He says the booklet details strategies on how to cope with stress associated with financial loss and retrenchment.

"It's a booklet that helps to focus our attention through education on the things that we need to do if in fact we're in either of those two categories," he said.

"I think more importantly it's designed to educate us all about how to deal with change that might affect our lives and that of our families."

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Senate rejects dole payment changes

The Senate has knocked back the Federal Government's plans to change compliance requirements for people on unemployment benefits.

Currently, a job seeker can have two months of benefits docked if they miss three job interviews or work-for-the-dole requirements in a year.

Under the proposed changes, a job seeker would initially lose just one day's pay for each missed appointment.

The Opposition's employment participation spokesman, Andrew Southcott, says the Government's bill watered down mutual obligation.

"What they are proposing is a compliance regime for job seekers which is both more complex and less effective. So, the Opposition was unable to support this change," he said.

Senator Nick Xenophon also voted with the Opposition and the bill was defeated in the Senate last night.

The Federal Government is confident the bill will be passed when it reintroduces it to the Senate again next year.

Financial crisis will hurt jobs, Swan warns

Job cuts inevitable...Wayne Swan.

Job losses across Australia will be inevitable as the effects of the global financial crisis hit Australian businesses, Treasurer Wayne Swan says.

Economists have predicted national growth could slow to 1.25 per cent next year, resulting in the loss off an estimated 200,000 jobs.

Mr Swan refused to speculate on the extent of job losses but conceded the national unemployment rate would rise.

"There is no doubt that the global financial crisis will have an impact on employment growth in Australia and there is no doubt that we will see over time unemployment move up," he told reporters in Brisbane.

"There is a very big challenge coming Australia's way from the global financial crisis ... that is why we have moved with such speed to boost and strengthen our economy immediately."

The Treasurer said the Government's growth forecasts would be released next month as part of its mid-year economic review.

Future Fund slightly lower on financial crisis fears

The Federal Government's Future Fund has taken a small hit from the global financial crisis.

The fund had a positive return last financial year but in the three months to September it has been slightly negative.

Its overall value is now $63.4 billion, which is fractionally lower than when it was set up more than a year ago.

But Finance Minister Lindsay Tanner says the fund is in good shape and has maintained its value in extraordinary times.

"This is a very significant and positive result... in the circumstances that the Future Fund has been dealing with, given the huge drops in share prices - not only in Australian markets but also internationally and there is every hope, of course, that these share price reductions will be corrected in the medium term," he said.

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Worst case is something up to the level of the Great Depression which was 20 per cent unemployment and lasting up to a decade.

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Economists predict unemployment rate rise

Official figures to be released today are expected to show the slowing economy pushed the unemployment rate up last month.

Economists are forecasting that the jobless rate jumped from 4.1 to 4.3 per cent in September, and that no new jobs were created.

ANZ economist Katie Dean says employment growth has been strong in the last six months, despite the slowing economy, but employers are now starting to scale back their hiring.

"Employment is normally one of the last indicators to turn around," she said.

"Generally firms are more than willing to hold on to their employees until they absolutely necessarily have to make job cuts.

"Certainly we could see that extended in this cycle given that the economy has been beset by skills shortages for so long.

"Employment growth in Australia has been very strong over the last six months or so, but the leading indicators do suggest that this growth or strong growth is not going to be sustained."

Ms Dean also says the financial crisis could add to unemployment.

"As the impact of the turmoil starts to flow through to some of those sectors which are more exposed, for example finance and insurance," she said.

In August, there was a surprising fall in the unemployment rate as employers continued to hire new staff.

Unemployment up to 4.3pc

The unemployment rate has jumped from 4.1 per cent to 4.3 per cent.

Official figures just released show the number of people in work in September also rose slightly by just over 2,000.

ANZ economist Katie Dean said earlier this morning employment growth has been strong in the last six months, despite the slowing economy, but employers are now starting to scale back their hiring.


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Associate Pofesor Steven Keen. Steven Keen has come increasingly to prominence over the past couple of years specialising in the economics of Australia's spiralling household debt burden.

PROFESSOR STEVEN KEEN: Best case scenario is a recession more severe than 1990 and lasting one and a half times as long.

Worst case is something up to the level of the Great Depression which was 20 per cent unemployment and lasting up to a decade.

Worked for the dole and ended up injured

GREGORY WARREN THOMSON went out to work for the dole and ended up injured.

His previous job working for his unemployment benefits in northern NSW had been with the Tweed Maritime Museum, but on September 21 five years ago he was asked to present himself at a labour hire company the next day.

Not having been told anything to the contrary, he expected a similar job and turned up in similar clothing and the flat-soled shoes he wore at the museum.

Mr Thomson was taken by bus to a farm for distressed animals and told to do fencing work. When he asked for steel capped boots, which other workers were wearing, the supervisor told him no boots were available for him.

Mr Thomson, then 36, was given little or no instruction, supervision, or training and ordered to help put up a 1.8-metre fence with cyclone mesh to keep in alpacas and wallabies.

The fence was to be erected on a rocky and downwards sloping uneven area with stones and loose gravel.

To attach the mesh Mr Thomson had to work with his hands above his head, looking upwards, while walking across rubble. His feet slid and he fell down the slope into a trench.

Mr Thompson's lower left leg snapped and the bone was pushing through the skin. He was taken to hospital in extreme pain over dirt roads without any first aid. He needed an operation and was bedridden for three months.

Last week he was awarded $199,550.19 in compensation for past and future economic losses and expenses.

The District Court judge Brian Knox found Twin Towns Employment Enterprises owed Mr Thomson a duty of care. "There was an inequality of bargaining power between the parties given that the plaintiff was effectively required to work for the defendant where, and when, and how he was directed - otherwise he would risk losing unemployment benefits," Judge Knox said.

"[Mr Thomson] had very little say in the work he carried out."

Less-punitive work-for-the-dole scheme

The Federal Government says proposed changes to the work-for-the-dole scheme are likely to encourage more unemployed Australians to take up work.

The Government says the automatic eight-week suspension of dole payments for people who refuse to work or do not seek employment is too harsh.

Under a bill introduced today, people who miss appointments would initially be docked a day's pay.

Those who continue to miss appointments would incur the eight-week suspension, but they can have the money reinstated if they agree to extra work.

The Employment Participation Minister, Brendan O'Connor, says the bill is a vast improvement on the previous arrangements.

"Australians in these circumstances are more likely to overcome an extended period of unemployment if the employment system encourages commitment rather than the current punitive approach," he said.