Ahead of next week’s federal budget, it is time to remind you of my budget commandment: “Everything is affordable if the government chooses to care about it.” There has never been a true priority of a government, or an emergency, or urgent expense which has not been paid for because the government could not afford it, because it had to “live within its means”.

I point this out because we are going to hear a lot about budget decisions and deficits and I want you all to realise that every single thing done and not done in the budget is because of a choice made by the government. Nothing happens “just because”.

With that said, let’s explain a few other things about the budget.

The figures will be wrong

The history of budget estimates is a story of optimism not coming true and pessimism being happily wrong.

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That doesn’t mean we should ignore all the numbers – or even think the Treasury department is incompetent. Forecasting is hard at the best of times. And these are not the best of times.

The numbers will be wrong – and as a result we really should not care too much about them. Unless you think the Liberal party was smart to produce a stack of “Back in Black” merchandise? The deficit is bigger, or smaller, than expected? We’ll see.

How will the government respond to the uncertainty?

Just because the numbers will be wrong doesn’t mean the government can shrug its shoulders. In December, no one could have predicted south-east Queensland would be hit by a cyclone. But we can predict that there will be more such events, more floods, more impacts of climate change. So, what is the government going to do about that?

Slightly less difficult to predict is what Donald Trump will do. If you want a sense of how tricky things are, the global economic uncertainty index is now as high as it was right at the start of the pandemic.

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Sure calling the tariffs “senseless” is fine, but what are you going to do about it? This is not just about tariffs on steel and aluminium, or even ones that may come on beef and pharmaceuticals. The reality is that what was once is no more. The world trade system, and our ability to trust our biggest defence ally, is all gone to hell. How will the government respond? Are they going to carry on with Aukus as though nothing has happened?

Thus far both the ALP and LNP are hoping to get through the election without having to come up with any plans. We should not let them get away with it.

Budget surpluses are often about tax

There will be a lot of talk about the budget deficit and how long till we get back to a surplus. Firstly, don’t worry. Just remember a budget surplus is just the government choosing to take more tax from all of us than it pays back. Is that good? Not really.

Governments don’t run profits or losses. You don’t get a dividend payout when they run a surplus – indeed, often you get less.

A big determinant of a deficit of surplus is tax. Last year the government collected the amount of tax that Howard and Costello used to get when they had surplus. This year the government will not raise that much tax and thus we are in deficit:

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But budget surpluses are not only about tax

Yes, tax is important but don’t fall into the trap of thinking the budget is just determined by world forces and oil or iron ore prices.

In 2023-24 the government delivered a budget surplus of $15.8bn. It did not do this because it gained more revenue than expected; it delivered a surplus because even though at the time those on jobseeker were living well below poverty, the government chose not to do anything about it.

It delivered a surplus because even though at the time nearly 22% of retirees were living in poverty, the government chose not to do anything about it.

It delivered a surplus because it chose not to spend $16bn more on education or healthcare or social assistance or infrastructure or on assistance towards net zero.

That is the reason a surplus was delivered – not tax.

This year it looks as though the government is about to deliver a deficit of around $27bn. That is not because of poor company tax or events – but because the government has chosen not to raise more revenue.

This year the government will spend around $4.8bn giving a fuel tax credit to the mining industry (which is not exactly struggling). The government will forgo $18.6bn in revenue due to giving the richest 10% a 50% discount on capital gains tax, and $20.3bn by giving tax breaks to the richest 10% so they can put money into superannuation.

Had the government not chosen to do these things, the budget would have been in surplus.

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Budgets are always about choices

Two weeks ago the government’s own Economic Inclusion Advisory Committee released its 2025 report calling for jobseeker to be increased to 90% of the age pension.

They called for this because jobseeker is currently well below the poverty line:

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The current base rate of the age pension is $1,047.10; if you include the supplements, it is $1,144.40. To raise jobseeker to 90% of the base rate would cost $3.5bn and to raise it to 90% of the total including supplements would cost $5.2bn.

Again, think of what the government is choosing to spend its money on or give tax breaks to:

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Will the government raise jobseeker? Probably not. But do not let them tell you they had no choice.

All budgets are about choices – who they tax, who they give tax breaks to, what and who they spend money on, what and who they don’t. Nothing is unable to be changed. It is just about whether or not they care enough to change it.