We continue to face severe economic uncertainty. The budget's economic forecasts assume a return to normal or "a clear path back to pre-crisis levels". Unemployment is forecast to peak at 8 per cent - higher than in the memory of most young job-seekers, but by no means a historical peak. Our growth rates jump back to trend levels. If we are lucky these optimistic forecasts will match reality. They all fall apart if we suffer another wave of COVID-19, no vaccine is found, or overseas infection rates continue to rise. This year's record $214 billion deficit will drop to a mere $112 billion deficit next year only if the economy bounces back.

It is a possible scenario. If things work out, this budget will tide us over well. It enables the economy to keep ticking over, holds a lid on unemployment, and makes helpful contributions to improving physical infrastructure.

The strategy works for today. If, however, the virus reasserts itself, we will be back to drawing board with a different budget for May next year - and we will be in desperate need of an update by then if the health outlook sours.

This was also a very Coalition budget, with a strong emphasis on business subsidies and tax cuts.

There are numerous ways a government can help job creation; they can do it directly, through government job creation, or indirectly through business. For the Coalition the second way is best. At the centre of the budget are subsidies to encourage businesses to employ young people (JobMaker), wage subsidies for businesses to employ apprentices, training subsidies (JobTrainer) and more allowance for asset write-offs (a measure that allows businesses to reduce taxes). These subsidies will all help create employment - but on the way, enrich the businesses that use them.

This relies on businesses having confidence to use the subsidies on offer. That is not a given - a business won't take on new staff, no matter how subsidised, if it does not see a future. So the government faces a continuing challenge to persuade businesses that there is positive outlook.

Business confidence does not just depend on how well the government sells its policies but on the underlying health outlook. If there were a third wave in Victoria, a second wave in other states, or mutation in the virus that makes it more virulent and widespread globally, then businesses will pull down the shutters, not invest and employ, wait to ride out the crisis. This is not the budget scenario but equally as possible as other budget forecasts.

Tax cuts were another budget centrepiece. The mantra that "under the Coalition taxes will always be lower" was repeated in this budget speech. The government has structured the tax cuts to favour middle income earners - politically sensible, to encourage their passage through the Senate, but also targeted to maximise benefits for swinging voters.

There are numerous other politically targeted measures - one-off cash payments to pensioners and beneficiaries, new environment spending, reforms to superannuation so super follows the worker and funds are measured on their performance (more long-awaited reforms), more spending on mental health and social wellbeing. During the middle stretch of the budget speech this could have been a Labor budget, so many broadly socially responsible policies were adopted.

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It will therefore be hard for Labor to mount a case against this budget. The government is, however, hostage to its optimism about the virus. If we get on top of COVID-19 this budget will have succeeded - and we won't know that for months.

For the Australian Public Service it means this budget has to be implemented as diligently and quickly as possible. It is not a radical departure from past policy settings. Most of it involves payments to other parties - business and other jurisdictions. What this means is that the core work of the public service will continue relatively unaffected by the budget.

Nevertheless, Canberra continues to face budget uncertainty. The local economy will depend more than at any other time in recent history on other governments: how well Victoria gets on top of its outbreaks, how successful other states and territories are in avoiding second waves, and whether governments in other countries get COVID-19 under control.

It is an uncomfortable position for whoever becomes government following the coming ACT election. Although we have done a good job in controlling the pandemic locally, that will make little difference to our economic future if other jurisdictions drop the ball. Budget Paper number 1 outlines these risks - we have been warned - but we have no control over them.