So where does the end of Budget week leave us?

The overall impression is of a Government brilliant at media management, pretty good at spending, and competent — barely — at saving. On the other side is a divided Opposition unable to settle on a single message and led by a bloke who has promised so much but underdelivered so far.

This is one of the most economically uncertain periods in Australian history. We no longer feel on the brink of economic disaster, but whether a recovery is years away or already occurring is the subject of legitimate debate. The eventual return to surplus — and the separate issue of moving to an underlying fiscal balance — is directly dependent on the resolution of this uncertainty.

What the Government has failed to provide is a conviction that, if things don’t go well globally, it will be able to maintain some degree of fiscal control and not just blame the rest of the world. What the Opposition has been unable to provide is a sense that it doesn’t regard surpluses as more important than unemployment or that it has a clear idea of how it would achieve a surplus.

So far the Government’s stimulus strategy seems to be working. But at some point Kevin Rudd will run out of excuses to spend. That will be a different test of the character of his Government, and possibly a much harder one.

Peter Fray

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