The way the coffee drinkers of Canberra greeted Josh Frydenberg on Wednesday made it plain the Treasurer will be the government’s best asset in winning back city voters when the charm offensive gets under way for next week’s budget.
That makes Frydenberg the most useful leader to campaign with Dave Sharma in Wentworth, Trent Zimmerman in North Sydney, Gladys Liu in Chisholm and Tim Wilson in Goldstein. These are the streets Peter Dutton cannot walk down. Not easily, at least. The Defence Minister can be used in Queensland but not in Sydney or Melbourne. Morrison, meanwhile, will only be a liability for Liberals who need to hold their seats close to the city centres.
The central assumption of the budget is that the rate of economic growth will outpace the interest rate on the debt, allowing debt to subside as a proportion of GDP over time. The assumption is hostage to global interest rates. There is no pledge in sight to reduce debt in absolute terms, so what if those rates increase? Just when Australia thinks it is jogging comfortably on the treadmill of global financial markets, it could be left out of breath when the machine speeds up.
The essential yardstick in Frydenberg’s budget, and the holy grail for the Liberals, is that taxes will stay below 23.9 per cent of GDP. This was the average during the years when John Howard was prime minister and has become a self-imposed restraint on the Abbott, Turnbull and Morrison governments. It has helped deliver what many voters want: lower taxes and smaller government. But it also looks like an artificial number from an ancient era.