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Budget 1997: ACOSS President gives his views.

JOHN HIGHFIELD: Well, tonight's Budget, I suppose you could say, is free from the long list of nasties that hit those of social welfare benefits last year, although there are cuts to public housing and further tightening to prevent against social security fraud. To comment on the impact of this Budget on the disadvantaged in our community - and there are many of them - we're joined now in the Canberra studio by Robert FitzGerald, President of the Australian Council of Social Services. He's speaking again to Fran Kelly.

FRAN KELLY: Robert FitzGerald, the centrepiece of this Budget is the savings initiative. It's a tax break on interest on savings. Will this help the disadvantaged?

ROBERT FITZGERALD: No, because what we know is that low-income people are actually not natural savers. This measure will particularly help self-funded retirees and higher middle income earners.

FRAN KELLY: How much would you have to have to savings in order for this tax break to be worth anything?

ROBERT FITZGERALD: Well, to be worth anything it comes in at a much lower figure, but it's maximum at about $60,000. But the point we'd raise is simply this: how can the Government afford a $3.5 billion tax incentive over the next three to four years and not be able to afford public housing which is cut, no increases in community services generally and, in fact, other tightening in relation to social security? It seems an extraordinary position that we can afford a huge, a massive tax incentive to particularly better off people and not be able to afford to sustain or improve the quality of funding, particularly in areas of greatest need.

FRAN KELLY: Well, you've been fighting the argument against the L-A-W tax cuts for a long time, though - I mean, this is that come into play. That argument aside, there isn't the long list of nasties here that there was the last time, though, is there?

ROBERT FITZGERALD: No. And there's actually some positives. Certainly the Government's moved in relation to a number of areas of carers, they've improved the position of domiciliary nursing care benefits. There has been increasing emergency relief and there's been some increases in mental health funding and palliative care - all of which is to be welcomed. But against that there have been some savage cuts. Public housing will affect hundreds of people on public housing waiting lists. We've seen a number of other areas in terms of tightening of criteria. And I think overall we've seen a situation where you'd have to be uncertain that the measures will in fact deliver significant decreases in unemployment during this year.

FRAN KELLY: You mentioned the positives there in terms of carers. There also seems to be some changes, though, in cuts to child disability allowance. The Government says that particular allowance is growing by 17 per cent per annum and they actually don't believe it. I mean, is that cruel or is that fair?

ROBERT FITZGERALD: There's a couple of things on that one. On the one side carers' pensions are now going to be available for people with profoundly disabled children but on the other hand they're now starting to target the other area. I think some of these we're going to have to really look at the detail, but I think some of the assumptions the Government is making may not in fact be accurate.

It's a bit like the pharmaceutical benefits scheme. That has real benefit long term if it leads to cheaper generic drugs being introduced. But in the short term consumers will pay more. The Government acknowledges that. The argument is about how much more. So we see, in a sense, good and bad all in the same measures in this Budget. It's certainly not the long list of negatives we saw last year, but does it redress the pain that that budget caused? The answer is probably no.

FRAN KELLY: All right. But doesn't the nation overall, as the Government will argue, benefit from a budget in surplus, stronger growth, lower unemployment - all of which are promised here?

ROBERT FITZGERALD: Yes, if they dealt with the revenue side. The interesting thing about this Budget is it's in fact probably worse than last year in terms of the mix between revenue and expenditure. What we're actually seeing, instead of restoring the revenue base, as is absolutely necessary, we're actually going to see it in decline again. The Government's also cut expenditure and expenditure has been cut by $1.5 billion in this Budget, give or take.

So one of the things we haven't dealt with is the fundamental flaw in the Budget and that happens to be the nature of revenue, both the fact of stopping the leaks and restoring the base.

FRAN KELLY: Very, very briefly, would you say this is a political budget?

ROBERT FITZGERALD: Well, to some extent absolutely. It's very much targeted to better off Australians. But we do want to acknowledge the Government has obviously listened to many of us and seen that it has to be more pro-active in terms of employment, hence the Regional Development Fund, the Federation Fund. It's just disappointing you've got to wait so long to see any benefits from it.

FRAN KELLY: Robert FitzGerald, thank you.

JOHN HIGHFIELD: And Robert FitzGerald of ACOSS there with an interesting perspective on the down side of this particular Budget.