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This paper reflects a common and continuing concern among our organisations about long-term unemployment. This paper is the product of our ongoing collaboration and represents our shared view on priorities to address this question as a matter of importance in the forthcoming Federal Budget. Government policy and actions aimed at the problem of unemployment are reviewed and the Pathways to Work Alliance members express particular concern with: the risk of young Australians failing to make the transition from school to work effectively; the importance for successful transition of as many students as possible completing the equivalent of year 12 education; barriers to successful re-employment of (particularly older) workers who have been retrenched; and the stubbornly high number of people who have been unemployed more than 12 months and need different/better assistance, if they are to re-enter employment. The Alliance recommends: amongst the various expenditure categories, that the priority given to the issue of long-term unemployment be raised; and that the Government stand ready to respond rapidly with employment creating initiatives in the event that the world economic situation worsens. While decisions on the sourcing and allocation of funds remain the Government's responsibility, consistent with the position outlined above, it is the view of the Alliance that: existing funding commitments to employment assistance and other job related programs must be preserved and enhanced as proposed above; various options do exist for sourcing the funds necessary for implementing the proposals above; the current mix of expenditure and revenue measures (for example, tax breaks, rebates or broad eligibility for certain family assistance provisions) benefiting the more well-off, could usefully be reviewed in this light.