The second Budget for 2022 has been released, and it’s Labor’s first budget in nine years – it’s a Budget that’s been prepared in very difficult circumstances – there’s a national government debt of almost a trillion dollars – inflation is now running at 7.3% – and there’s a whole lot of demands about what the government should be doing with taxpayer funds over the next few years.

But economics isn’t just about debt and inflation, there’s a wide range of issues to take into account – there’s revenue, how this money is spent, there’s productivity issues, there’s consumer behaviour issues – and, of course, there’s the politics.

Budgets are all about government trying to achieve their policy objectives, according to their ideological persuasions – but the Labor government is trying to balance a number of different factors, difficult economic circumstances, managing expectations, keeping their election promises – but this first Budget from Jim Chalmers seems to be about building trust with the electorate first up – and of course, there’s going to be people that aren’t happy with the Budget – and it is disappointing from a climate change perspective – and there’s still no additional support for people on Jobseeker – but it’s a Budget that’s getting back to that idea of people at the centre of the economy, and that’s an important first step.

And whenever there’s a Budget announcement – even if it is the second one of the year – there’s also the Budget right of reply for the leader of the opposition, and Peter Dutton hit all the predictable issues, such as cost of living issues, broken promises, cost of gas and electricity – and just like the media, he’s fixated on the $275 reduction in power prices that Labor promised during the election campaign.

That was a power reduction that was promised by 2025 – two years away, but it’s not stopping Dutton from making it seem like that’s a promise that has been broken right now – it’s hard work being in Opposition, trying to make yourselves seem relevant, when your not, and especially when a new government is trying to fix up all the severe budget problems that the Coalition has created over the past nine years – you have to hope that the electorate is going to forget all of these problems that were left behind – but at this stage, Dutton has to look for all the small issues to gain traction, not just for the Liberal and National Parties, but for his own position as well.

Where can Labor improve? This is a good start, but there’ll be another Budget in May 2023, and Labor could do six-monthly Budgets for the first two years of this term if they wanted to – but most economists agree that inflation is the biggest issue facing the federal Budget – and most economists agree that this is what Labor has done right.

But it will have to do more to address inflation – some of this is controllable, some is not – the first big step for Jim Chalmers has been to gain credibility with the Australian public, but they’ll also have to defy what they said they were going to do during the election campaign – address falling wages – but it can’t do that until inflation is under control.

So, that’s one of the first big issues they need to do more with, but they’ve got another Budget in May next year – but they can’t move on many other issues until they address this first.