Australia has done much better than most of the developed world.

Those on the right complain about "big" government yet the most successful country over the period from 2007 has been China which is dominated by the largest government bureaucracy ever known. Why? Probably because the government follows updated Keynesian policies, just what the Rudd Gillard governments did.

Everyone not in the top few per-cent, in Australia, has suffered because the Rudd and Gillard government were not willing to risk educating citizens on known economic truths.
Failure to move early against the dominant but foolish and misleading neo-liberal economic nonsense, has allowed Abbott and Hockey and the other 'drys' to mislead the population with their claims that the sovereign government is constrained in the same way citizens businesses and even non currency issuing governments, such as the Australian States of the member countries of the European Monetary Union are constrained.

A few of the economic truths are;
1. Sovereign Government debt should be an aim provided the debt is directed towards improving employment opportunities and building publically owned infrastructure, preferably productive infrastructure like modern efficient low carbon power generation, high speed freight and passenger transport, maybe even new publicly owned airports and banks or even low cost public housing for sale to the genuinely disadvantaged.

2. Whenever unemployment is high the sovereign government and the economy is missing opportunities to be better prepared for the future.

3. Austerity will lead to an economic turndown, a strategy only necessary if inflation is a serious problem. Carried out in any other circumstance, when there is little inflation risk, austerity can lead to a recession and possibly even a major depression as is now happening in Europe.

Read about reality at the blog of UMKC, New Economic Perspectives.

It's not the govt that has failed the unemployed, but the unemployed?
As a young and able boded person, I traveled thousands of miles, to take up "any" work, the few times I confronted unemployment.
There were some very highly paid jobs going begging, simply because some wouldn't get off their backsides, and accept relocation or retraining for new jobs?
That retraining however, must match genuine employment opportunities, which must preference Australians first!
That said, I believe job start could be far more generous, in return for the end of unfair dismissals?
This will allow some employers to take on more staff, in the knowledge if he/she gets a bad one, they can be dismissed without fanfare or the fear of costly legal reprisals!
However, even then, there ought to be some rationalized total time limit to work-start, that could only ever be extended, if the unemployed undertake genuine retraining!
Retraining centres ought to have mandatory creches, so that single mums can undertake retraining as well; and schools ought to feature some after school activity, so that the usual latch key kids, don't wander the streets, getting up to all sorts of mischief or trouble.
That way, the unemployed will have no genuine excuse or be able to blame others or their depressed circumstances, for their situations?
Rhrosty.

I've been writing about the burgeoning, increasingly expensive and mainly privatised 'unemployment industry' on OLO for years - with little acknowledgment from other commenters, who have been mostly interested in following the mainstream-narrative script of demonising and pathologising welfare dependency.

I'm glad to see someone else writing about it. However, this is not the fault of the Labor government. The unemployment industry was well and truly underway during the Howard era and, to a lesser extent, the Keating years. Because no government can dare to challenge the real cause of increasing unemployment in First-World countries - i.e. neoliberalism and globalisation - the unemployment industry will only get bigger, more cumbersome, less accountable and ridiculously expensive

Foyle: Meant to say in my above comment that I agree with all your points. Good post.

Whilst I feel sorry for anyone not having a job I find the constant attention on unemployment a mere diversion tactic. The debates should be the unemployables have failed the Government.

Labor may have failed to help the unemployed but it is the coalition that will, as they have in the past, harm the unemployed. The hatred, scapegoating and punitive policies will all return with a vengeance under an abboot led government.