Although the Law Institute of Victoria (LIV) and the Victorian Bar yesterday both welcomed the $24.7 million in funding allocated for Victorian Legal Aid in the state budget, both stressed the importance of the Federal Government following suit next week.

"We will be looking at next week's Federal Budget in the hope that there is a recognition that Victoria Legal Aid is underfunded and deserves more support," said LIV president Danny Barlow.

There is also mounting pressure on the Government to loosen up the rigid Commonwealth/State legal aid spending agreement under which Federal funding can be strictly only used for Commonwealth matters. In practise, this amounts to family law matters (although issues such as child protection and domestic violence remain in the domain of the states), drug importation (though again, states are responsible for possession or trafficking of drugs produced domestically) and terrorism offences.

According to Victorian Bar chairman John Digby, the Commonwealth should be willing to take on more of the burden of legal aid funding that it is currently doing.

"The Bar thinks that the Commonwealth is not yet recognising a much larger responsibility to provide funding," he said. "The Federal Government is far better funded because it draws on much more immense tax incomes than the state government, yet it's looking at it in an artificially restrictive way, saying 'We'll only give back money that the taxpayers have all contributed to discrete areas that have particular Commonwealth relevance', rather than taking a much more holistic view."

Last August Attorney-General Robert McClelland said he was reviewing the Commonwealth legal aid policy - put in place by the previous government in 1996 - admitting it created "artificial barriers to justice, but so far there's been no conclusive indication that it will be changed.

"We see that [Victorian] State Attorney General Rob Hulls has been very focused on this issue and it doing the best he can in the circumstances but we are not yet of the view that the Federal Government has done as much as it should have, and that it can do," Digby said.

- Zoe Lyon