Government intervention in this country has been an epic failure. 1 in 8 rely on welfare yet we still have, with the other anglo countries, the highest poverty rates in the OECD even though we have the most generous and progressive tax system in the world (http://www.sprc.unsw.edu.au/ASPC2005/papers/Paper7.pdf).
Welfare keeps people in poverty because it pays people to remain poor. And it is too hard to get a job because of high award wages and unfair dismissal laws. What minimum wages actually say is that if your skills don't justify a wage rate of that minimum, you don't deserve to have a job at all.
Unions are not the answer to higher wages. Wages rise over time from productivity and competition for labour. Living standards for the poorest parts of society rose just as fast when unions comprised only a fraction of the workforce. The effect unions have on other workers is basically supply and demand. They push people out of heavily unionised industries by restricting entry, thereby lifting the wages for their members. (That is why doctors lobby for such restrictive entry into their occupation. It has nothing to do with what is good for the community) That is also why unions want unfair dismissal laws and high award wages; to protect their members from competition. The people who get pushed out of the unionised industries have to line up in dole queues or take lower paid jobs. Unions are only special interest groups which protect their members at the expense of other workers. the one in ten children in Australia who live in a household where no one works can tell you that.

The big question is, "What has changed?". Are battlers more feckless than they were in past times? Do they smoke or drink more? Do they spend more on consumer items like televisions? Are wages today higher or lower relative to productivity?

One thing that is beyond question is that the cost of housing has increased markedly. Another thing beyond question is that the regulation and restriction on landowners with respect to developing their land is now far greater than it was. The former is a direct result of the latter. Easing the restrictions, for example by allowing landowners within 15 km of the cbd to subdivide blocks without all the red tape, would at least relieve the housing shortage.

Perhaps instead of bashing the battlers for making poor decisions (Why else would they be battlers?), there could be a little more discussion as to whether government policy (e.g. development restriction, high immigration) is making the plight of battlers easier or harder?

This sentence from your article was the most mind-blowing to me:
'...with the proportion of the working age population relying mostly on welfare increasing from 3 to 16 per cent since 1965 (Peter Saunders, Sydney Morning Herald, February 21, 2009...

If, as you say, approximately 20 percent of Australian households are reliant on government handouts, then I would say 'Yes, the plight of the Australian battler will get worse'.

the government makes its way by taxing the absolute limit out of its long-suffering productive component, and yet it still has trouble meeting its self-appointed responsibilities.

Thank the heavens for inflation and bracket creep, hey, Mr Rudd?