Joe Hockey's first budget will hurt, but it's not the austerity we feared

For example, Mr Costello in 1996: ''Our government could not stand back and ignore the problem. Although we did not create it, we will take the responsibility to fix it.'' Mr Hockey: ''This challenge is not of our making, but we, the women and men behind me, accept responsibility to fix it. Doing nothing is not an option.'' Mr Costello again: ''Far from saving, the previous government kept ratcheting up our debts, spending money it didn't have.'' And Mr Hockey: ''The days of borrow and spend must come to an end.'' You get the idea.

Many Canberrans remember well the Howard government's first term, which was tougher on this city than any other part of Australia. The ACT is now poised to suffer again. It has already been squeezed hard in recent years by Labor's economy drive, which was applied mostly through its ''efficiency dividend'' - the annual cut to government agencies' administrative budgets. Before it won office last year, the Coalition regularly criticised this dividend. So, too, did Tony Shepherd's recent commission of audit, which described it as ''a particularly blunt instrument to achieve budgetary savings'' that punished all agencies equally, regardless of whether they were frugal or wasteful.

Yet the dividend will stay for another three years at least, and the government will use it to gouge even more money from the bureaucracy than did Labor. On Tuesday night, Finance Minister Mathias Cormann and Public Service Minister Eric Abetz even had the cheek to say they would manage ''Labor's largely indiscriminate cuts in a more structured manner'', when they were extending those cuts to a level never reached under the ALP. The hypocrisy of modern political discourse has few boundaries.

This budget will hurt some Canberrans deeply. Of the 16,500 public servants who will lose their jobs over the next few years, it is possible as many as half will be ACT residents. Not all of them will be ready to retire, and not all will be able to find other work. Their pain and anxiety will not be salved by Mr Hockey's view that ''it is the time to face the facts''.

Nonetheless, it must be acknowledged that, despite the fears leading up to it (which the Coalition wilfully inflated), this is not an austerity budget. It certainly heralds significant changes, especially for the public sector, but there are few signs that Canberra will suffer to the extent it did in the mid-1990s. Back then, house prices fell for three years in a row; the ACT bankruptcy rate soared; and, in 1995-96, the city's economy shrank by more than 1 per cent. However, what is often forgotten about that time is that the worst of the economic shocks were felt during the last years of the Keating government, not under the new Howard government.

Indeed, with the exception of a handful of policy differences, Mr Hockey's first budget is what one might have expected former Labor treasurer Wayne Swan to deliver, as he chased the elusive surplus that he had foolishly made a political necessity. Yes, Labor would perhaps not have cut spending on health, education and welfare so swiftly, nor did the ALP have the Abbott government's eagerness to scale back industry assistance. But the underlying philosophies that guide the two parties do not appear vastly different.

For evidence, consider this budget's only real surprise: the ''no new taxes'' Prime Minister Tony Abbott, who warned that the carbon tax was destroying the economy, does not think much of keeping promises. Indeed, he plans to raise taxes to 25.5 per cent of gross domestic product in 2017-18, a level far above that of the Rudd or Gillard governments. Similarly, Mr Abbott's urgent ''debt crisis'' has dissolved; he is now happy to achieve a surplus by the end of the decade.

Smaller government? In time, perhaps. But only if Mr Abbott's leadership survives. This budget, so full of broken promises, will not be forgotten, and will not help him.