Australia, we have a budget problem, wrapped in a political problem.

The mid year economic update confirms the budget problem, again. It’s not a “debt and deficit disaster” or a “crisis” or the economic equivalent of a “trashed” house or any of the other hyperbolic descriptions the Coalition used to use.

But the political system does seem stuck – unable to agree on how the deficits should be cleared or how to accelerate growth or stoke business confidence. The result is a vulnerable economy and unemployment slowly rising.

The political debate focuses on those numbers, the deficits (declining much more slowly than forecast – with no surplus in sight until the end of the next term of government) and economic growth (unchanged from the May budget at levels too slow to make much of a difference to unemployment).

But it is those unemployment forecasts that tell us the human consequences of this economic story.

And the update shows unemployment hitting 6.5% over the next two years, before gradually falling off again. It is already at 6.3% - that’s 778,000 people without a job. Youth unemployment is over 14%. Given that the car industry is set to shut up shop by 2017, and the continued decline in mining investment, some economists question whether these forecasts are optimistic.

Slower revenue – because of lower commodity prices and slow wages growth – was by far the biggest contributor to the worse than predicted deficits. Government decisions added to it – spending $1.3bn on national security and another $1.59bn in revenue forgone because of duties given up through the Japan free trade agreement, offset by yet more sweeping cuts to spending on foreign aid.

Concessions made in the Senate and the cost of delays in legislation cost the budget another $10.6bn over four years, with the government calculating another $33.9bn of revenue at risk from measures not yet legislated.

But if we raise our eyes from the columns of figures it becomes clear that neither major party seems to be able to tell us how they will successfully reduce deficits or promote growth enough to significantly reduce joblessness.

“We are the only people with a plan on the table,” the treasurer, Joe Hockey, insisted as he released the figures.

But he then continued to maintain that his budget was the only viable way of making spending cuts, and the “narrative” in the budget update talks up the same underwhelming formula for improving economic growth – $50bn in infrastructure spending – much of it rebadged existing spending, and meaningless calculations of how many “pages” of regulation have been added to the bonfire of red tape.

In fact the budget does not reflect the only possible combination of policies that might cut spending. Despite a clear public verdict that some of the budget measures were unfair, they remain government policy and these savings – which may never eventuate – remain embedded in the budget bottom line.

And Labor appears unwilling to move on from the schadenfreude of pointing out Hockey’s previous statements about how revenue write-downs during its term in government were all Labor’s fault, and he was the only one who would ever return the budget to surplus. Like the Coalition in opposition, Labor promises a fully costed economic plan well before the next election, but voters have heard all that before and would be well advised to insist on the detail.

Whether Hockey is any more likely than Wayne Swan to deliver a surplus is not the point. The challenge is for a government, any government, to find savings that are fair, and then make a case that convinces the public and the Senate to accept them, and also to explain to voters where the new post-mining boom jobs might be created.