Published online by Cambridge University Press: 01 January 1999
High levels of long-term unemployment have undermined some of the assumptions of the post-war welfare state. In response most OECD governments are now replacing what have been characterised as passive income support payments with active benefit systems. Many have introduced new time limits to unconditional benefit entitlement in the form of job and training guarantees for those without work. This article describes how the 1993–6 Australian Labor government modernised its commitment to full employment by combining labour market programmes and social security reforms to create a Job Compact for the long-term unemployed. It analyses the achievements of the strategy and what went wrong, and it draws out lessons of relevance to the British Labour government which has committed itself to using job guarantees to build new bridges between welfare and work.