The Coalition has a short term budget problem and its rhetoric is becoming increasingly shrill about needing to fix its fiscal imbalance now. If this doesn't happen then the country will go backwards.

The short term budget problem results from cutting revenue (from carbon pricing and the mining tax) and the possibility of its cuts to government expenditure not getting through the Senate. Well, the Coalition could act to phase out fossil fuel subsidies and slush funds for polluters; or infrastructure builds to facilitate coal export profits. After all China and India, Australia's biggest target customers for export coal, are moving away from coal to renewable energy on an industry scale.

At this stage the Senate looks likely to block a number of savings measures, including lowering the tax-free threshold from $19,400; the scrapping of family tax benefits and other welfare changes; the scrapping of the low-income superannuation contribution boost; the axing of the Australian Renewable Energy Agency; and the indexation of the age pension. These saving measures are primarily going after low- and middle-income families in the form of winding back the welfare state.