As Peter Costello works to convince Australians this is the Budget 'we had to have', Councils across the nation are reeling from the impact various cuts will have on their communities.

Cuts to childcare, roads and infrastructure, labour market programs, the environment and regional development will all hurt local communities. The slashing of the Local Government Development Program and assistance to public libraries, together with implications for Local Government via ensuing State Budgets, with a $600 million cut to Commonwealth-State funding, all affect Council resources.

The Federal Government's removal of operational support to not for profit long day childcare means some Councils face a bill of up to $1 million per year to continue providing the same number of places. Additional costs, of approximately $1,000 per child, will have to be borne by families or centres will be forced to close.

In rejecting Labor and giving a decisive mandate to John Howard's Coalition Government, voters were prepared for some tough decisions. However, serious concerns have been raised about cuts to programs providing assistance to the more needy sections of our community, such as the unemployed, aborigines, older people and students.

The axing of programs assisting the long term unemployed not only limits opportunities to gain new skills for re entering the workforce, but Councils that have used these programs, to undertake various infrastructure and environmental works on behalf of their communities, will also miss out.

In moving towards a smaller, leaner public sector the Government is banking on business taking up the shortfall and providing new job opportunities. If this gamble fails, a blow out in unemployment levels and stalled growth would create an economic downturn.

Prior to the last election, the Australian Local Government Association (ALGA) together with the Australian Council of Social Service (ACOSS) expressed concerns that both major parties were placing too much emphasis on narrow economic objectives, particularly in reducing the public sector.

ALGA and ACOSS rightly point out that economic reform and social development must go hand in hand to meet the needs of people and their communities. They further claim national policy makers have become engrossed in the big picture of economic reform, forgetting the real life impact on ordinary Australians.

ALGA President, David Plumridge, has stated that the Federal Budget again reflects a preoccupation with narrow fiscal and monetary policies. He says it fails to understand that we live in a society not an economy, that people do not exist for economies; economies exist to further the quality of life for people.

David Plumridge has called for a broader strategy to tackle the widening gap between the rich and poor, and the rich and poor regions, by assisting communities, reducing unemployment, supporting regional Australia and above all, preventing the growth of an American-style underclass.