Who'd want to be treasurer?

Given it may well be the last budget before the next election, Treasurer Jim Chalmers, above, was under pressure to use his second windfall surplus in this week's federal budget to spend up; particularly in areas where Labor is under threat from the Greens.

Dr Chalmers has had to make some difficult choices while striving to strike a politically palatable balance.

One of the hardest has been to sell the remodelled tax cuts as the principal form of cost-of-living relief. While that sounds all well and good it's very cold comfort to people on the basic wage who will only take home an extra $15.91 a week from July 1.

The bulk of the benefit from the tax cuts, which according to Treasury "were legislated under very different economic circumstances" and will cost $105.7 billion over the forward estimates period from 2023-24 to 2027-28, will go to those earning $80,000 or more a year. While there is some targeted relief for pensioners and social security recipients (who don't pay tax) there is very little on offer for those who serve food, stack supermarket shelves and help keep the country going.

There was some good news for the south-west with $150m set aside to upgrade the Maroona to Portland freight rail line, which will divert hundreds of trucks from our pot-holed roads and create more than 100 jobs in associated industries once completed.

But, according to Wannon MP Dan Tehan, millions set aside by his former government for upgrades to the dilapidated Princes Highway west of Colac were not reinstated in the budget after they were cut 12 months ago.

The Treasurer has repeatedly assured RBA chief Michelle Bullock he did have inflation on his mind while he was thinking about the budget, but there are some big ticket items that will have an inflationary impact down the track. The "Future Made In Australia" strategy, which the government obviously hopes will be an election winner, is a Damoclean sword. While, on the one hand, it makes sense to invest in Australian manufacturing and strengthen national supply chains, great care must be taken to avoid bankrolling loss-making enterprises that will need taxpayer funding in perpetuity.

It is also inevitable that the big spend on social and affordable housing, while absolutely necessary and long overdue, will drive up construction costs - and probably wages - in the building sector.

Ms Bullock, and her board, will mark Dr Chalmers's homework on June 17, just over a month from now.

Watch this space.

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Greg Best, editor, The Standard