ELEANOR HALL: The budget has been attacked from two entirely different perspectives this morning.
The tabloid press has accused the Government of attacking and "gouging families of $150,000", attacking aspirational households by winding back on middle-class welfare.
But many economists are arguing those cuts don't go far enough.
To discuss who wins and who loses, and what more should be done I'm joined in the studio now by our economics correspondent Stephen Long, and also by Brian Toohey, one of the nation's longest serving political journalists and a leading commentator on economics and public policy.
Starting with you Stephen, the front page of the Daily Telegraph today says Wayne Swan's budget "pickpockets" families and that it is hard-working families in "mortgaged poverty" that will be hardest hit. Is that a fair characterisation of who is bearing the brunt of the budget cuts?
STEPHEN LONG: No, I don't think so. It's an inaccurate misleading and very, very superficial critique of the budget, Eleanor. They're talking about measures to wind back on family benefits and various other small benefits to families on $150,000 a year. Now let's put that in context. On the Treasury's figures, there are 40,000 households earning $150,000 a year or more. There are 8.5 million households in Australia so we are talking less than half a per cent of all households who are on that money.
Now well-paid newspaper editors and Canberra press gallery journalists might feel that these are modest incomes but the reality is that $150,000 a year puts you in the well-to-do bracket nationally. There is only about 3 per cent of workers who earn more than $100,000 a year; average weekly earnings are $65,000.
We are talking about people who are relatively well-off and a tiny, tiny proportion of households overall and the benefits that they will lose, we are talking of less than $30 a year for a child with the winding back of the supplement to the various family tax benefit arrangements. Small money for people who are relatively well to do.
Now I accept that if you are on $150,000 living in Sydney, paying a mortgage where house prices are through the roof, it might feel tough and you're not rich in the sense that you are living high on the hog. Very different experience to someone in a country town or say Hobart but you are still, the objective reality says, in the top bracket and the question is who deserves a handout?
Does everybody deserve a handout? Where do we cut it off?
ELEANOR HALL: Brian Toohey, do you agree?
BRIAN TOOHEY: I do and in fact they are not actually cuts. All they're saying is that the threshold for the cut off, $150,000 is not going to be indexed upwards with the CPI but one of the glaring ones that isn't touched at all is the Pharmaceutical Benefits Scheme where people on $300,000 a year or more, tax free superannuation payouts in retirement, can get subsidised prescription drugs for the same as the base rate aged pensioner which is $5.60 a go, whereas someone slaving away in the workforce on the minimum wage which is worth less than $30,000 a year.
So someone on 10 times as much gets drugs for $5.60 and the person on the minimum wage pays $34.20 - more than six times as much.
So there is plenty of scope to start cutting what I would call in this case upper class welfare to create more money for doing the worthwhile things that can be done in the budget about trying to help people get back into work who haven't got jobs et cetera, et cetera.
ELEANOR HALL: The Government says there are $22 billion worth of savings in this budget. Who is feeling the pain of those cuts?
BRIAN TOOHEY: I don't think anyone much. It is remarkable how they have done this. I mean some of it is counted in money like the flood levy and so forth which strictly speaking isn't a cut but it is remarkable how they've done this in a fairly painless way.
For example, or ways that no one could object to, for example they are saving over, this is all over four years these savings, you should bear that in mind, that for the tax rebate for the dependent spouse who is under 40 and has got no children. Now why if you want people to get back into the workforce would you create in the tax system a disincentive for that person to go to work? Now they are removing that. I don't think it is a tough measure but it does raise $755 million over that time period.
Another thing they are doing is saying that people who have got high incomes and split that income with children who are under 16 so that, and they at the moment are getting the low income tax offset, that no longer will they be able to get the low- it's just a rort. So how could anyone really object to that? And that raises about $740 million. So there are a lot of measures like that which aren't that painful. There is one or two in there that possibly are.
ELEANOR HALL: Stephen, we heard Penny Wong saying that the Government's moves to get single mothers and disability pensioners into the workforce were built on solid Labor values. Will they work?
STEPHEN LONG: Well, I wonder what she means by solid Labor values and I question whether they will work and it really depends on how the Government does it. There is two ways you can do it. Now, there are some commendable measures spoken about in the budget papers in discussion which involve actually creating a readiness for people to go into jobs but if it is punitive and just pushing people into low wage insecure jobs, I don't know that it is going to work.
There are two issues here, Eleanor and that's that for many, many years governments of various political persuasions have tried to get people on welfare, the long term unemployed, people on disability pensions who actually could do some work back into the workforce.
The harsh reality is a lot of these people aren't ready to work, employers don't want to hire them in any job and so the Government is, and I think it is intending to spend big money to actually try and assist these people to get the skills they need to get into the workforce.
That is one side of it and that is consistent with Labor values and it might possibly work but it is going to take a big effort.
But the other side is there is an assumption in all the discussion around this from the Government and just about everybody that somehow this is a universally good thing, that any job is better than no job and we will be giving these people the dignity of work, the dignity of labour.
Now there is a whole body of medical research and other research that actually says that pushing people into low wage, insecure jobs that can often be quite oppressive and give people little control can actually undermine their health and well being.