After comprehensively losing the battle to sell Budget 1.0 to the public because of its perceived unfairness, the Coalition has undertaken a remarkable series of Damascene peregrinations in Budget 2.0. Treasurer Joe Hockey waves to the public gallery ahead of Opposition Leader Bill Shorten delivering the budget in reply address at Parliament House. Credit:Andrew Meares Gone is the "lifters and leaners" rhetoric; gone, too, is the marked emphasis on the debt and deficit disaster inherited from Labor. As Prime Minister Tony Abbott said on Friday: "We made some very tough decisions in last year's budget. As a result of last year's budget, we got some $30 billion of savings through the Senate and that's the foundation on which this year's budget builds. It is a carefully targeted budget, it is a budget which wants to do the right thing by families and by small businesses. It is a budget that is focused on jobs and making it easier for people to deal with cost-of-living pressures." Liberal Party pollster Mark Textor says this budget has to win over the political middle ground; though he is not so explicit, that means middle class families, small businesses and an old cohort with a new name – Howards Battlers have become Tony's Tradies.

"The more there is a concentration on the extreme ends of the economic spectrum, the so called rich and poor, the opportunity cost of that is to not concentrate on the middle and it's the middle's hard work and perseverance that en masse provides the economic productivity and stimulus to get an economy firing," Textor says. Treasurer Joe Hockey and Prime Minister Tony Abbott have got their mojo back after their more user friendly second budget. Credit:Alex Ellinghausen "As does the hard work and innovation of small business. It's not rocket science." "With small business, the people who get up early, open their stores and businesses and innovate, they are the ones who provide the productive edge for the economy and provide the jobs, which is still the number one issue." Fresh from a key role in David Cameron's victory over Ed Milliband in the UK, Textor compares Bill Shorten to the vanquished Labour leader.

The more each leader goes on about the downtrodden working class versus the rich, Textor says, the more the middle ground is ignored – at Labor and Labour's political peril. So why is the Abbott government targeting groups like Tony's Tradies? Because it seeks to re-occupy the middle ground, re-capture the base and build a platform for the next election – whenever that might be. As the Prime Minister put it: "I certainly have an enormous amount of respect for the people who are out there having a go. They are the backbone of any society. They are certainly the backbone of any strong economy. So, I want to encourage them to have a go. I think it's in our DNA to want to have a go. We all love giving people a fair go. It is only because most of us have a go that all of us can get the fair go that every Australian deserves." In the lead up to the budget, Hockey endured something of a week from hell.

From a very awkward pre-budget photo shoot, in which the Prime Minister appeared to be consoling a depressed Treasurer, through backgrounding by back benchers against him to a media blitz by rising star Scott Morrison. Dubbed the treasurer in waiting by some in his party – Morrison gave 16 interviews in 7 days to Hockey's 4 while he was hunkered down in the Treasury building - it was hard to miss the enormous weight of expectation on the member for North Sydney. But Hockey has been everywhere since budget day, with his natural ebullience noticeably returning during his National Press Club address. In four days the treasurer came roaring back, giving at least 26 interviews. By week's end he had spoken to everyone from FM radio stations and hard-hitting current affairs programs to website Buzzfeed. He even managed to compare the process of putting the budget together to the pain of childbirth (yes, really).

Hockey dismissed the wall of criticism directed his way and said the government had, for example, reduced daily spending on debt from $133 million to $96 million. "There's still work to be done, but the budget repair task continues. At the same time, we are working hard to give Australians the opportunity to have a go, and in doing so, we are empowering Australia's small businesses to go out, to invest and hopefully to create more jobs which I'm absolutely confident they will do." The emphasis on wanting Australians to "have a go" – chiefly driven by the $5.5 billion in tax breaks for small business and a $3.5 billion families package – could not be more different to Budget 1.0. Abbott, Hockey and co. lost the debate in 2014 because it was framed around fairness. As a result, the Prime Minister almost lost his job.

The political missteps were myriad – the authorised Hockey biography, pictures of the cigar-smoking Treasurer and his "poor people don't drive cars" gaffe, as well as measures like a six month wait for the dole, hits to pensions and $80 billion in cuts to schools and hospitals over a decade. As Hockey admitted earlier this year: "We tried to do 40 years of budget repair and a decade of structural reform in one document. That was clearly too much." Some of the harshest measures have been jettisoned by this budget and the Abbott economic team has been revamped. What emerged on Tuesday was a very different document from last year's. In his Thursday night budget-in-reply speech, Bill Shorten again hammered the fairness theme, mentioning it 19 times while also making his own attempt to re-occupy the political middle ground by holding out the prospect of a 5 per cent tax cut for small business and pledging to "fight for equity".

"If Labor had not stood strong, if the government had had its wilful way, if Tony Abbott had controlled the Senate – last year's malignant budget would have passed – with all its social vandalism. And if he gets another chance, by having this one confirmed, he will, by ricochet, inflict last year's unfairnesses this year. Unfairness which remains at the core of this political document," Shorten said. The opposition leader highlighted the $80 billion in reduced funding over a decade to hospitals and schools, universities and family benefits that remain from Budget 1.0, buried and unspoken of this time around, and the unaddressed problem of bracket creep. "In every respect this budget is a hoax – it is an attempt to pull the wool over the eyes of Australians. Where it counts, this is last year's budget - rebranded, reheated and repackaged for an opinion poll," he said. It was, Abbott said, "an unfunded wish list" from Shorten, drawing a sharp contradistinction on economic responsibility. But the plan to stop so-called "double dipping" and "rorting" of the federal paid parental leave by new parentshas blown up in the Coalition's face.

After five years of arguing for an extraordinarily generous government scheme, the plan to take money away from mothers makes little sense. The fact that Finance Minister Mathias Cormann and Frydenberg have themselves "double-dipped" added insult to injury. Pragmatism is the new black for the Coalition. Insiders say the Expenditure Review Committee has benefited immeasurably from the new faces – Morrison and Assistant Treasurer Josh Frydenberg, as well as from new secretaries in the Department of Prime Minister and Cabinet, Treasury and Finance. Working dinners helped foster an esprit de corps and, with the prime minister chairing every meeting, the new direction was set.

So while the deficit is still falling, albeit more slowly, with the help of what have widely been described as somewhat optimistic economic forecasts, to $35 billion next financial year and to $6.9 billion by 2018-19, the government is also tilling new political ground. Hockey has been quick to emphasise the loss of $90 billion in expected revenue that government coffers have missed out on since coming to office. Never mind that in opposition, Hockey lashed his predecessor Wayne Swan for lamenting those same revenue write-downs. Fresh battlelines have been drawn on tax. Labor has promised two new revenue measures, via changes to multinational taxation and superannuation tax concessions it says will raise $21 billion over a decade.

Hockey says that "we could increase taxes on the Australian people to recover that lost revenue, but that's the wrong formula at this point. We certainly want to make sure that Australians have the chance to invest and grow their businesses and hitting Australians with new taxes is not the answer". Hockey has been quick to claim the tax changes in relation to multinationals and the so-called "Netflix" tax are a tightening of existing laws, rather than new taxes. "Fairness is essential to the integrity of our taxation system…. We do not want to increase taxes on Australians, but we do want everyone to pay their fair share of tax along the way," the Treasurer said in his budget reply. If the shift in rhetoric, emphasis and tone feels like something of a high wire act, that's because it is. Labor is presented with a much smaller target in 2015. The political calculus is clear.

Fairfax Media spoke to a key quartet of rebel MPs this week who had publicly backed the spill motion designed to boot out Abbott in February. It is clear that the existential threat to the prime minister's political life, particularly from unhappy Queensland and Victorian MPs who saw first term state governments booted out, has receded. Queensland Liberal MP Mal Brough, a former cabinet minister in the Howard government who in January confirmed he had been approached to challenge the Prime Minister, says the second budget has the balance about right, though there is more to do to address the deficit. February's spill motion was "a reflection on the fact that we weren't engaged in a way that the public wanted us to" and he won't countenance talk of a second spill. "There is an acknowledgement that it is a much better and more inclusive government," he says.

Fellow Queensland MP Andrew Laming says there is now "zero chance" of a second spill. "Back in January there were four things we wanted to fix and the message hadn't got through…all four of those issues have been addressed," he said. "It's the Medicare co-payment, defence pay, indexation of pensions and the possibility of penalty rates changes for low income workers through the Productivity Commission report. All of those four are now definitively off the table." Victorian MP Sharman​ Stone doubts the likelihood of another spill motion, too. "I think it was very important at the time, of course I outed myself as an active participant in that, I thought it was desperately needed at the time but Tony and his fellow cabinet ministers have made enormous efforts, it was a real wake-up call. Things are vastly different and better now," she says.

There is even talk, not entirely shut down by Abbott this week, of an early election, such is the shift in purpose, focus and sentiment following the second budget. Most government MPs Fairfax Media spoke to doubt such an eventuality in the short term, but the fact that those conversations have begun is telling in itself. For now, Tony Abbott and Joe Hockey will be content to walk the high wire, pragmatic safety net in place.