Scott Morrison made his first speech to the national press club on Wednesday as treasurer. Here are four things we learned from it:

1. The Coalition’s personal income tax cuts will be modest

This is basically what Tony Abbott and Joe Hockey were planning and has obviously been what Malcolm Turnbull and Morrison would be forced to do after they ditched the idea of raking in the big money by increasing the GST. Morrison went to some lengths to emphasise that the tax cuts would be “modest”. Very modest.

“You’re obviously looking at far more modest measures. Far more modest measures,” he said. “I think modest would be the way I’d seek to frame expectations around these things.”

The government will pay for the modest personal income tax cuts by closing other tax loopholes, things like superannuation tax concessions, some changes to negative gearing and curbing other personal income tax deductions.

It’s impossible to say exactly how much these changes will raise because the government has not yet said what it will do but Chris Richardson, of Deloitte Access Economics, was able to provide some rough calculations about the personal tax cuts that could be delivered with about $10bn a year.

On his numbers, lowering the 32.5% tax rate to 30% and increasing the threshold at which it is applied from $80,000 to $100,000 would give a worker on $100,000 a year a $47 a week tax cut, a worker on $80,000 a year a $20 a week tax cut and someone on $60,000 a tax cut of $11 a week. Combining it with a $100 increase to the low-income tax offset would mean the lowest-paid workers would be $2 a week better off.

At the lower-income levels that package is either less generous or not much more generous than the 2003 tax cuts derided by the former Howard government minister Amanda Vanstone as being barely enough to buy a sandwich and a milkshake.

2. The states are facing the ‘fiscal cliff’ on hospital and schools funding on their own

The former Labor government had promised the states $57bn in long-term hospital funding after protracted negotiations to address the fact that the cost of hospitals – as the population aged and medical technologies became more expensive – was projected to exceed some states’ entire budgets over time. The Abbott government cut this agreement in its 2014 budget, meaning that promised 9% per year funding increases after July 2017 would fall to 4.5%.

All states insist they cannot possibly operate existing hospitals with this funding and that, without substantial extra money from the commonwealth, they are facing a funding crisis. The New South Wales premier, Mike Baird, calculated the shortfall would reach $35bn nationally by 2030.

Asked about this, Morrison insisted it was the states’ problem to fix.

“I don’t think states are branch offices of the commonwealth,” he said. “I think they are sovereign governments ... in no business in this country would anyone just accept someone walking into their office and saying the increase in cost is 8%, give me the cheque. We all have to manage our budgets. The states almost without an exception, one or two are in surplus at the present.”

Except of course it isn’t a business walking in asking for more money but state governments, with whom the federal government has joint responsibility to fund a functioning hospital system, asking that the commonwealth take joint responsibility.

3. The problem the Coalition once said was urgent and called a ‘debt and deficit disaster’ will take a very, very long time to fix

Morrison said the Coalition had so far “saved” $80bn but then spent $70bn of it on other things.

“We have also cut taxes on the mining tax and the carbon tax, which means that, after these last couple of years, we are basically in the same position that we were two years ago,” he said.

He described this as “holding the line” on spending and signalled similar “curbs on new spending” in his May budget, rather than spending cuts.

He conceded this meant any reduction in the budget deficit could only occur very gradually, over a period of many years and many budgets because budget repair was like “a test match, not a Twenty20 Big Bash”.

4. All of which means the next election is shaping up as a choice between income tax cuts and services

It seems the election campaign is to be fought as an ideological argument between the Coalition’s belief in smaller government and rewarding the hard-working earners weighed down by the impact of bracket creep (“They’re the ones who really deserve compensation,” Morrison said) and Labor’s belief that the nation’s social compact requires the federal government to spend more on hospitals and schools.

Each major party is intending to fund its priorities with slightly different plans to rein in tax concessions (superannuation, negative gearing, personal tax deductions) and, in Labor’s case, tobacco excise and multinational tax avoidance.