Budget 2017: Morrison must swap axe for cheese slicer

Scott Morrison’s objective tomorrow will be to deliver a final and decisive break from the fury of the Abbott/Hockey 2014/2015 manifesto which still hangs around the Coalition’s neck like a dead albatross.

The Treasurer’s “Age of the Achievable” marks a belief that traditional budget orthodoxy is dead and only political realities and deliverable outcomes over ideology, however, fiscally valid, will cut it.

Less axe, more cheese slicer.

As Peter Costello would maintain, it has ever been thus. But Morrison’s very clear intention is to ensure that the government offends no one, including the Senate.

Fiscally, and politically, this will be one of the most challenging tasks facing any Treasurer for a decade.

As always, there are competing interests but perhaps more perilous consequences for getting it even slightly wrong.

At one end of the rope he has the ratings agencies ready to pounce on any negative recalibration of the deficit trajectory.

While the loss of the AAA rating will have no material fiscal impact, it would deliver a critical blow to the Coalition’s claim to economic supremacy.

Tugging at the other is a jaded and weary electorate insistent that while the government cuts spending, it leaves welfare alone and somehow maintains essential services in education and health with a lower tax base.

In this environment Morrison could be tempted to deliver a milder version of the tax-and-spend philosophy with which he has sought to crucify Labor.

The signals of spending are self-evident.

Morrison will attempt to put these in context of a lower overall envelope of growth of 2 per cent — considerably lower than Labor’s.

The big mystery — or miracle — will be what mechanisms he has for revenue. It is unlikely that Morrison will use such a blunt instrument as simply raising the Medicare Levy or surcharge in isolation as a counter to the lifting of the deficit levy.

He will have to be more creative than that considering that any demonstration of a “rich can pay” approach will solidify the contempt the Liberal base already has for its own government.

Morrison by his own admission will avoid using overly optimistic growth figures to fatten up the goose. The ratings agencies, and the nation’s creditors, simply won’t believe them.

Morrison has attracted considerable criticism since becoming Treasurer. However, his challenges — and obstacles — are considerably greater than treasurers of the recent and not so recent past.

Andrew Robb’s review of the Liberal Party’s election campaign rightly opined that it was a government’s first budget rather than its third that was the most critical as it set the political narrative for the course of the entire term. In that fashion, Morrison’s crucible will also speak to the providence of the Turnbull government.