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Budget surplus: it was a good idea at the time

There's bad news for Scott Morrison: Joe Hockey might be gone but his years of chanting about government debt and deficits have not been forgotten.

Treasurer ScoMo would have us believe that the public is over the whole budget crisis thing.

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Essential Report polling says the opposite.

In an interview with Fairfax's Phillip Coorey, Morrison says it's pointless trying to predict when the budget will be back in the black.

Scott Morrison is hoping people aren't too hung up on JOe Hockey's surplus rhetoric.
Scott Morrison is hoping people aren't too hung up on JOe Hockey's surplus rhetoric.  Photo: Alex Ellinghausen

Apparently Morrison believes the public isn't obsessed with the issue any more either.

"What people are looking for, and what we will seek to continue to provide next year, is to give people a sense of calm confidence despite the challenges they are very well aware of," says the Treasurer after three months in the job.

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"They don't need to be reminded. They understand the situation of where the budget's at, they understand what's happening in the rest of the world, they understand that we had a mining boom, they get all that.

But that's not what Essential Report polling found earlier this month.

Rather than having a sense of "calm confidence", 65 per cent of people were either very or somewhat concerned about the current government's spending after being told that the Colaition's spending, at 26 per cent of GDP, was higher than that of the Rudd government during the financial crisis.

The Treasurer has a long way to go in changing the electorate's mind about the urgency (or not) of achieving a return to surplus.

Especially when that prospect remains distant, given the settings outlined in the mid-year economic and fiscal outlook statement.

Surplus stalled

Having ruled out the option of any increase in the overall tax take, Morrison, like Hockey, is unlikely to ever deliver a surplus.

Hence the need to convince the electorate dire Coalition's warnings about the evil of deficits and the need for an urgent return to surplus were, um, just a good idea at the time.

Instead, calm confidence is supposed to take care of matters by growing the economy into surplus – at some point.

As for the forecast annual government net interest bill rising to $15 billion, when debt is 18.5 per cent of GDP in 2017-18, well, let's move on.

There was a positive morsel for the treasurer in the Essential poll.

Until informed of the reality of government spending, only 22 per cent thought the Coalition was spending more than Labor.

Among Coalition voters, the power of rhetoric was strongest – just 12 per cent realised spending had increased.

After being told of the reality, 4 per cent were "not at all concerned" about the present level of government spending and 19 per cent were "not very concerned".

Along with 12 per cent who didn't know if they were concerned or not, that's a base of 35 per cent that the treasurer's calm confidence needs to build on.

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