The latest budget numbers should be a shock to all Australians and should remind us that we have a large and growing fiscal problem. And that should be the government's big chance to show that only the Coalition can confront and fix the mess left by Labor.

The current messaging is still not quite right. Even the estimate about growth seems a bit too optimistic and Treasurer Joe Hockey says the budget is stronger now than what it was a year ago. How can that be when the deficit is headed towards $40 billion now and more than $100 billion over the next four years? And what is this nonsense about the budget being a shock absorber? Wouldn't it be better to scrub the slogans and simply say that the budget deficit has got even bigger, if we don't cut spending then we will pay a heavy price later for not getting our finances under control and Labor caused many of our problems and they are now making the situation worse.



In my first Fairfax column back in January I wrote that the government should be doing more about unemployment. Finally last weekend the obvious is now the subject of comment from the government. The latest figures show unemployment at a 12-year high and the highest youth unemployment since 1997. The government should take up the cudgels and put some legislation into the Parliament that would help young people. Abbott could easily introduce bills to address specific workplace relations problems, reinforce the need for reform and put some pressure on Labor's Neanderthal approach.



The big thing that the government got right in the 2014 budget was that they put expenditure at the centre of their economic policy. Yes, they confused the message and did not cut enough, but they had the right idea. They are still trying, in some cases they have compromised on the basis that getting something is better than nothing and in the meantime the budget is getting worse. Australia is not in recession and while that is the case then the government needs to keep pressing for more cuts. There is still a lot of fat in the system. Despite the economists saying these smaller cuts don't count, the truth is that the government needs to demonstrate that government should first look after the pennies and then the pounds will look after themselves.



There is not a lot to be said about Bill Shorten: he is the usual Labor Opposition Leader, which I don't say with any malice. This is just how they operate. He has played the spoiler role all year, keeping his team focussed on attacking the government but otherwise being of no help to our country. The good old days when Howard's Opposition supported the then-Labor government's big reforms are dead.



Tony Abbott has done some good things. He implemented his big promises to abolish the carbon tax and stop the boats. The shocking days under Labor of people drowning at sea have come to an end and the huge costs of housing of asylum seekers is now finally being cut back. He has been a good ambassador for Australia and his leadership in dealing with the Russians over the murderous behaviour of Putin's separatists was exactly what most Australians expected of the Prime Minister. On the economy one of his biggest achievements was to sign three very important trade deals – a task beyond Labor for many years. His interest in indigenous affairs is commendable. He has worked hard to better manage the country's finances but has had to wear obstruction from a Senate elected under a system that clearly needs to be reformed soon.



As the year has ended, Abbott must be looking forward to a break. But he should also remember that having your back to the wall while still being confident that you are on the right path is not a bad position to be in. A week is a long time in politics, another year is a lifetime and without doubt 2015 will not be short of political surprises.

The big thing that the government got right in the 2014 budget was that they put expenditure at the centre of their economic policy. Credit:Alex Ellinghausen

Peter Reith was a Howard government minister and is a Fairfax columnist.