Crunch time for Abbott as Budget looms

Cartoon / Rod Emmerson

Tonight is make-or-break night for Prime Minister Tony Abbott as his Government reveals its first Budget to a nation that is expecting the worst.

How Abbott has framed his economic strategy and how he markets it to voters will define his first term and, possibly, determine whether he wins another. He will present Labor with a huge political target of broken promises that will fuel the Opposition's rhetoric for the next two years. Breach of faith is not easily forgiven by the electorate, especially when it hits their hip pockets.

Abbott is clearly betting on voters' short memories, hoping that by slugging them so early in the political cycle the pain will ease and, with an improving economy, reduce the threat of retribution at the next election.

Treasurer Joe Hockey has included a bit of sugar: twice-yearly increases in the fuel tax will fund A$40 billion in roads programmes, matched by the states and private business; the debt reduction levy will hit only high-income earners; politicians and senior public servants will go without pay rises for a year.

Other sweeteners may also emerge tonight. But the politics centre on whether any economic gains emerge in time to offset the bite of cuts to some of the most sensitive areas of government spending.

The other wild card is Labor and the performance of Opposition leader Bill Shorten, who has been handed a fairly easy ride so far. He will have to not only successfully undermine Abbott, but also overcome the deep and bitter anger that doomed the party last September, and convince still-sceptical voters of Labor's ability to govern.

Successive polls have handed Labor a commanding lead over the Coalition, the latest a ReachTel poll in weekend Fairfax newspapers giving the Opposition an election-winning 54-46 per cent advantage.

New polling by Morgan Research confirmed that even Abbott's power base is worried. More than 70 per cent of Liberals surveyed believe the Budget will not benefit them or their families, rising to 97 per cent among Labor and Greens voters.

Business, which fears cutting too deep will damage the economy, has similar fears: 80 per cent of businesses with fewer than five employees and 67 per cent of big companies expect no benefits. Other polls show widespread opposition to expected health and welfare measures.

ReachTel found more than two-thirds of respondents opposed raising the pension age to 70. Essential Research said most Australians believed the gap between rich and poor in healthcare was widening and more than 60 per cent opposed planned fees for GP visits, which are free at present.

Many fear that the poor and vulnerable will bear the brunt of Hockey's plan to hack the Budget back into surplus. Spending and programme cuts will hit health, welfare and education hard. Access to support programmes will become more difficult and, critics say, heartless. Thousands of disability pensioners will be forced on to lower dole payments, and disabled people under 35 will be medically reassessed to push as many as possible back into the workforce. Motorists will be hit by twice-yearly increases in the fuel levy, tied to inflation.

The biggest blow will fall on people living in regional Australia and on the expanding fringes of the big cities, where public transport barely exists and people are faced with long commutes.

The public service will be gutted, with massive job losses as more than 70 departments and agencies are abolished or pruned and rolled into other bodies. High-profile targets include Customs and Immigration, which will be merged. Most of the environmental agencies established by Labor will go. So will the National Water Commission, which advises government of the best management of water on the world's driest continent.

To ride through all this to the next election, Abbott has to convince Australians that the pain will produce gain, that he has not broken any promises, and that the whip will be felt equally by all.

So far he has made little headway. And his decision to freeze politicians' and top bureaucrats' pay - Abbott's salary will stay at A$500,000 - will not convince many voters. Abbott himself had dismissed an earlier freeze by former Labor Prime Minister Kevin Rudd as a "political gimmick".