Budget 2020: After this, the fiscal cupboard is bare

Josh Frydenberg may have brought out the big guns, but after this, there aren’t many shots left in the locker.

This is the underlying budget message. The resources of government are being depleted.

By the middle of the decade, gross debt could reach $1.7 trillion. And this is only if interest rates remain as low as they are now or lower.

This will far exceed the new $1.2 trillion debt cap the Treasurer imposed on Tuesday.

Net debt, the number government likes to use because it is lower — and is set against assets like the Future Fund — will peak at near $1 trillion by 2024.

While there may have never been a better time to borrow money, there is no less a money tree than exists a jobs tree.

Genuine economic growth must transition back to the engine room of the economy — the private sector, business and the people it employs.

While the headline tax relief numbers will make families feel it’s all about them, the government has rightly and unashamedly directed the bulk of the new spending to businesses.

This the right strategy and the only strategy. And it is the best shot the government has at getting businesses confident enough to invest again.

If there are any weaknesses in the strategy, they are the assumptions that underpin it.

The first is the delivery of a vaccine for the general population by the end of 2021, interest rates remaining low, all borders with the exception of Western Australia are open, and Daniel Andrews comes to his senses.

As much as there will be a temptation to view this budget through a political prism — as in electoral winners and losers — the only politics that really matter are that the thing works.

Frydenberg has thrown the kitchen sink at it to ensure the legacy of this recession doesn’t last a decade while trying not to economically enslave a future generation to pay for it.

If there was an overtly political message in the budget, it was the constant repetition of the term “COVID recession” by one of the government’s canniest retail politicians, Finance Minister Mathias Cormann. Cormann used the term with effect at least 10 times during his press conference with Frydenberg on Tuesday.

It is the first time the government has put a label to the economic crisis since Opposition Leader Anthony Albanese started labelling it the “Morrison recession”.

This was clearly a deliberate recasting of the government’s theming and perhaps a reflection of the risk that exists for the government if its growth and jobs numbers fall short.