Welfare and business plead for mercy in Federal Budget

WELFARE and business groups have urged the Abbott Government not to cut too deep in Treasurer Joe Hockey's first budget this May.

Both the Australian Industry Group and Australian Council of Social Services released their budget submissions on Monday, with both groups urging against deep cuts.

The submissions come at a critical time for Mr Hockey, who last week declared an end to "the age of entitlement" for business and individuals, setting the scene for a potentially brutal budget.

While both peak lobby groups have acknowledged the Federal Government's tough fiscal position, they said now was not the time for "deep program cuts".

ACOSS chief executive Dr Cassandra Goldie said a "gradual tightening" of the budget should focus on what disadvantaged people need, rather than want.

"The budget should take urgent action to meet the needs of those who are excluded from the benefits of a wealthy society - a job, affordable housing, a decent income, and basic community services such as disability services and dental and mental health care," she said.

The social services body called for action to reduce tax breaks like negative gearing improve welfare and the aged pensions, as well as improving superannuation rules.

Dr Goldie said taken wholly, the ACOSS submission could save the government's bottom line by $1 billion in 2014-15 and up to $5 billion in 2015-16, without cutting essential welfare payments or services.

While AIG chief executive Innes Willox did not urge specifically for more welfare spending, he said a "weakening economy" was not the time for "deep program cuts".

He said the budget would need to address long-term structural deficits, at the same time as lifting business confidence,

"In short, focus needs to be on not just consolidating the Budget over coming years but also on measures that will lift our productivity and competitiveness," Mr Willox said.

"Done correctly, this will ultimately help the fiscal consolidation objective by growing the tax base and assisting the recovery in tax revenues."