Income insurance !

The unions are proposing that Australia should implement a compulsory income insurance scheme. They argue that we insure our homes and our cars against loss - so why not our pay packets ?

There is nothing new about income insurance. All the big insurance companies have that product and it is widely used by self employed people and high income earners. The premiums are a legitimate tax deduction.

What the ACTU has in mind is a compulsory scheme attached to national superannuation. Just as the boss is forced to contribute to a worker's superannuation, this premium would be a similarly shared responsibility.

It all comes down to simple mathematics. If the contributions stay the same then the worker has income protection for a nominated period of time, but gets a smaller payout when he or she finally retires and looks to the superannuation nest egg.

The biggest winner would be the Federal government.

Last year I60,000 lost their jobs and many of them applied for " Newstart " with a payment of $ 228 per week, well below the poverty line.

What is not widely known is that " Newstart " is means tested, and applicants are rejected if their savings amount to more than $ 5,500. As a result, those that get some sort of redundancy settlement have to spend that money before the government starts to shell out, and those who are wise and save for their retirement become losers !

The winners - if existing below the poverty line on " Newstart " could be considered winners - are those who save nothing and live from one pay packet to the next !

There is merit in this ACTU suggestion provided the government doesn't use it as just another way to reduce welfare payments. When people become unemployed through no fault of their own everyone should receive equal help to restore their dignity, train for a new career - and find a paying job.

Savings of $ 5,500 is about the cost of a new plasma TV set. Surely the provident should not be reduced to that level before help is offered ?

Income insurance would be a good thing - provided it did not become an instrument of social engineering - designed to force all who lose their jobs because of economic circumstances to a common level - below the poverty line !