The Liberals have drawn a line under the leadership issue for the moment, but this week’s unsuccessful spill motion has changed fundamentally the dynamics within the government and the party.

Malcolm Turnbull is now seen as the clear prime ministerial alternative, never mind that his candidacy was never declared. This means his every move will be watched and forensically analysed by colleagues and media.

Turnbull doesn’t have to be disloyal to Tony Abbott. He has been thrust centre stage, and, assuming the polls stay bad, his mere presence becomes destabilising.

But the spectre of Turnbull is also hovering over the embattled Joe Hockey, with stories that some senior Liberals would like Abbott to put him in Joe’s job. One report said colleagues sounded Turnbull out before Christmas on whether he would accept Treasury.

The provenance of the reports is hard to track. At no stage has there been an Abbott offer, and Abbott has made it clear he is not intending to reshuffle his treasurer. Having Turnbull, about whom the Abbott office has always been somewhat paranoid, so close would be nearly unthinkable for Abbott.

But the speculation is damaging for a treasurer who’s struggling to get back onto his feet.

Hockey’s interview with 3AW’s Neil Mitchell on Wednesday told the painful story. A large slab of it was taken up with his position.

“I am not responding to gossip,” Hockey said of the speculation that he wouldn’t be in the job long term.

No, he hadn’t asked Abbott for a guarantee of his position.

And what if Abbott wanted him to go? “I have got my job. I am doing my job. That’s not going to change.”

Mitchell persisted, insisting the question of Hockey’s future was important in economic terms because his role was to instill confidence and that went to stability.

“I am the treasurer, I will be the treasurer and I am going to continue to do the treasurer’s role.” Would he do it long term? “I hope to do it long term … but that’s in the hands of the Australian people.”

And in Abbott’s hands? “In the hands of many people. We are doing the job.”

The knife was twisted further when Hockey was reminded that he used to be popular but in the recent talk about leadership contenders, he didn’t make the cut. “I am doing my job. … You know, someone has to make the right calls for Australia. We are doing that.”

Hockey likes to say “it is not about me”, but of course it is – because, with Abbott, he has to get across the government’s economic story.

Hockey might have thought his first budget would be his most important, but now his second is shaping up as a make-or-break one – for Abbott’s leadership and thus his own future. If Turnbull became prime minister, Hockey would immediately be replaced.

Hockey’s utterances indicate he’s going into the budget discussions trying hard to keep his colleagues to a tough fiscal stance.

Hockey’s not making concessions to the changed political environment the government is now in. What sort of accommodation he and an apparently increasingly pragmatic Abbott come to in the budget framing will be an interesting test.

In the battles within the government between now and May, Hockey will lack the degree of authority he could deploy a year ago. Out in the community, he’ll face great difficulty making the case to a public that has already dismissed him.

Hockey is putting a good deal of weight on the intergenerational report he’ll soon release to help with his case. He sees this as a basis for the “deeper conversation with the Australian people” that he promises.

But remember, we’ve had these reports since Peter Costello’s day. The official description says they “focus on the implications of demographic change for economic growth and assess the financial implications of continuing current policies and trends over the next four decades”. The last was 2010; before that, they appeared in 2007 and 2002.

Of course policies change and so the assessments do too; even the demography can alter slightly. But basically we already know the broad picture – the demographics require very substantial budget repair – so it won’t be a great surprise. Hockey might be unwise to think the new report will be a big conversation changer.

At the end of a testing interview, Mitchell asked Hockey whether he was enjoying the job. “I am doing the heavy lifting for my country,” Hockey said. “I am going to keep going because that’s what people say to me on the streets, ‘keep going, Joe’, and I am keeping going.”

Listen to the latest Politics with Michelle Grattan podcast with Clive Palmer, here.