Australians face working longer and harder as the labour force shrinks, while the Rudd government pins its hopes of economic recovery on the biggest nation building program since the Snowy Hydro Scheme.

But families will feel the most pain in Labor’s second budget delivered on Tuesday night because of moves to tighten access to so-called middle-class welfare which blossomed under the previous government.

Pensioners are the budget’s biggest winners and will receive a long-awaited weekly increase of $32.49 for singles, while couples will get a $10.14 a week increase.

Cross-bench senators Nick Xenophon, Family First’s Steve Fielding and the Greens, whose support will be crucial to passing the budget bills through parliament, had a lukewarm reaction to the budget.

However, they said they would need to examine the detail more closely before deciding whether they will oppose any measures.

“This is a Harvey Norman budget, it’s buy now, pay later,” Senator Xenophon said.

They welcomed the single pension rise but were puzzled at the omission of single parents while Senator Fielding said it was a “budget of broken dreams” for families.

Senator Brown said the budget was not “green” enough and left the tax cuts for the rich while the unemployed and single parents missed out.

Speaking at a Labor budget dinner at parliament house on Tuesday night, Prime Minister Kevin Rudd said the budget would support jobs now while putting in place the infrastructure of the future.

He warned the Opposition against a negative approach saying everyone needed to pull together to get Australia out of recession.

“We’re not out of the woods yet, there’s a long way to go. We are, literally, all in this together,” Mr Rudd told the gathering.

Treasurer Wayne Swan said the rise in the pension age by two years to 67 by 2023 would be “very unpopular” but necessary to pay for the pensions of baby boomers who begin reaching retirement age in 2011.

“I know it will bring some pain and angst to many,” Mr Swan told reporters.

“I don’t take this decision lightly, it won’t be popular, in fact, it’ll be very unpopular.”

Mr Swan said the budget’s main focus will be job creation and job support through its $22 billion nation building infrastructure spend, as it plotted a course for a return to surplus in six years’ time.

The budget forecasts a record $57.6 billion deficit in 2009/10 - a massive turnaround from a $22.7 billion surplus in last year’s budget.

Faced with a $210 billion collapse in revenue, Mr Swan said the government was faced with a choice to either raise taxes and go “slashing and burning” in areas like health or embark on a course of “responsible borrowing”.

But Opposition treasury spokesman Joe Hockey said Labor was “betting the house” on an economic upswing that hadn’t even begun.

He declared it was “casino economics” for the government to predict a return to surplus.

“It is going to have a profound impact on Australian families - $9,000 of debt for every man, for every woman for every child in Australia,” Mr Hockey said.

Infrastructure spending will focus on road and rail projects from central Queensland to metropolitan Perth to provide nation building projects Mr Swan promises we’ll tell our kids and grandchildren about.

Unveiling his second budget on Tuesday night, Mr Swan revealed little that was new from the measures leaked comprehensively in the past fortnight.

“Tonight we stand with the Australian people to say we refuse to be overwhelmed by the brutal force of this global recession,” Mr Swan said in his budget speech.

The government will spend $1.5 billion on its jobs and training compact aimed at forcing young jobless to remain in school or training rather than on the dole queue.

Mr Swan said unemployment is expected to reach 8.5 per cent, or about one million Australians in 2011 - an election year - but cautioned that without the stimulus spending since October, the forecast would be closer to 10 per cent.

New parents will gain from another long-awaited scheme - the 18 weeks of government-paid parental leave for those earning less than $150,000 from the start of 2011, costing $731 million over five years.

But Mr Swan warned that everyone, particularly those who have benefited in the past decade of growth, will have to suffer some pain and do their bit to haul Australia out of its first recession since the early 1990s.

AAP keh/kms/mo/jlw