And here's the rub. At this stage his plan to post Australia's first surplus in well over a decade by the early 2020s is built overwhelmingly on collecting more tax.

While the government was never going to make a song and dance about it, that's the ugly reality of the 2015 May budget.

Under the government's current fiscal plan, the biggest revenue hits will fall on people pushed by wage inflation and pay hikes into higher tax brackets – a process known as fiscal drag or bracket creep. Many of them are lower- and middle-income earners.

As The Australian Financial Review reported after the May budget, about 80 per cent of the rise in revenue over four years will come from bracket creep.

Ordinary tax payers will by 2016 account for around 63 per cent all the direct taxes Canberra levies on individuals, companies and from the petroleum resource rent tax.

By 2018-19 that figure will have swollen to 69 per cent, an extra $47 billion a year.

Receipts, as a share of gross domestic product, will rise 1.6 percentage points in four years to 25.2 per cent, the highest level since 2006.

None of these figures provide an election-winning platform for Hockey, who on Monday signalled he would pay for future tax cuts by squeezing spending.


While he didn't provide details of how this would occur in his speech, Hockey alluded to productivity within the public service, lamenting that it was difficult to measure.

But pulling even more out of the public sector will be a big ask, politically, as he is already leaning on the sector to fund budget repair.

One of the major assumptions in the May budget is that the government will trim payments as a share of GDP by 0.6 of a percentage point to 25.3 per cent between financial year 2016 and 2018-19.

Hockey is now flagging that he will hit the spending side even harder to pay for income tax cuts.

The other wild card for Hockey is what happens to the economy. It will be the single-biggest factor in whether he achieves his freshly minted dual ambition of handing down both surpluses and tax cuts.

Short of another boom, however, it's not sounding very likely.

The coming decade is highly unlikely to see a repeat of what the country enjoyed in the early 2000s, when the terms-of-trade boom provided a gusher of income and tax revenue that Prime Minister John Howard and Treasurer Peter Costello used to pay for income tax cuts.

Remember also, that Hockey's existing 10-year budget projection already assumes the economy will expand 3.5 per cent a year for the second half of that period. It hasn't even come close to such a performance in any one of the past six years.


Reserve Bank governor Glenn Stevens has been openly wondering whether such rates of growth are a thing of the past.

To be sure, it's good news that Hockey is at last talking about tax cuts, rather than merely hiking revenue. It's providing a welcome boost for Coalition supporters.

But it also smacks of a politician promising nice things without being upfront about the cost. A bit like when Labor committed to big new social spending plans for education and disability services without ever addressing the question of how they would be paid for.

Tax cuts are another big-ticket promise. Hockey's real test will be whether he can drag them out of the realm of fantasy land into reality.