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Trust deficit spells death for a salesman

Treasurer Joe Hockey describes this as "the budget that gets on with the job" of repairing a budget which was otherwise headed towards the rocks.

Yet the real job for the new Treasurer begins now, with what looks to be one of the more difficult sales jobs any treasurer has given himself in years.

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Almost no-one's hip pocket is untouched by Joe Hockey's budget, explains Matt Wade.

Indeed, he will now need to "get on with the job" not just of selling his budget but, crucially, of rebuilding the Coalition's relationship with voters. And he will need to start that task by salving some anger on the Coalition's own backbench.

As the hardworking Treasurer will be all too aware, balancing the books has been made doubly difficult by the constraints arising from a litany of unnecessary promises made by his leader Tony Abbott in the years leading up to the 2013 election.

Despite alarmist rhetoric warning of a budget emergency, an economic crisis, and a debt and deficit disaster, those promises effectively locked up about two-thirds of the budget by quarantining not just defence - a Coalition favourite - but the other big ticket items as well.

Quite deliberately, the pledges were delivered in consumer-friendly Abbott-ese, which is to say simply, clearly and often.


Voters remember them and so do Liberal MPs: no cuts to health, no cuts to education, no changes to pensions, no changes to the GST and no cuts to the ABC and SBS.

All were seen as likely Coalition targets if spending was to be trimmed. They were made expressly to kill off a Labor-Greens charge that "cuts to the bone" were coming under an intensely ideological Coalition government.

Voters will form their own views on whether that claim had merit. Few will welcome the individual measures where they are negatively affected. But that may change over time if the economy genuinely improves.

The government is to be commended for taking on a difficult task and for embracing both the opportunity and the responsibility of government to undertake reforms that may be initially unpopular but also necessary.

Much has been written about Abbott's promises, drawing the obvious parallel with Julia Gillard, who Abbott himself so effectively dispatched on the central question of trust.

Amazingly, Abbott now finds himself in the same boat.

It is hard to overstate the problem of trust created by this budget. The government's justification that the situation demands such medicine will be a bitter pill for many to swallow.

Consider Abbott's words just weeks before an election in which he was already sailing to victory. During one of a million election doorstops a reporter asked him: "The condition of the budget will not be an excuse for breaking promises?"

"Exactly right" the punchy opposition leader fired back. "We will keep our commitments that we make …" he went on to say for the umpteenth time in the campaign.

There were dozens of iterations of these commitments, many of them specific to particular areas, such as when Coalition figures were asked about a possible Medicare co-payment, which was generally ruled out.

Hockey will no doubt prove a better salesman than Wayne Swan did for Labor, who managed to go backwards even while handing out billions and saving the country from a global economic meltdown.

But he will need to be.

On his side is that the budget does some of the things governments should have done a long time ago. Restoring the indexation of fuel excise is one such measure because it protects a revenue stream that was otherwise dwindling.

But sensible as it is, the decision represents a broken promise.

And it is just one of many.

Hockey's belated argument is that the main promise was to fix the budget.

This is nonsense. As the quote from Abbott above makes transparent, clear-cut promises of no cuts to key areas were made in the context of the overall budget situation.

Justified as many of the structural savings announced in this budget are, there is no getting around the trust deficit Hockey and Abbott have just added to.

It's going to be a big job indeed.


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