If there was any question about what this budget would be about, the Reserve Bank’s surprise move on interest rates last Tuesday sealed the deal. This is a budget about the cost of living.

Australian households are feeling the squeeze. Real household incomes went backwards last year. Two groups are doing it particularly tough – low-income renters and low-income mortgage holders. Both face a sharp increase in housing and other costs, and have less discretionary “fat” in their spending to manage these pressures.