The third Chalmers budget is built on a hope that the government gets more time to fix its long-term problems

The task of successfully landing a budget in a weak economy in which you are also trying to wrestle inflation down is not easy economically. And it is even harder if you bring politics into it.

Much of the headline economic and political success of Jim Chalmers's third budget rests on just one measure: a decision that a lot of economists will hate and which gives every household a $300 rebate on their energy bills. 

The economists will hate it because it isn't narrowly targeted.

But there is method in what the government and Treasury have put together here.

While taxpayers will be getting the most generous tax cut they've had in years on July 1, there is that pesky problem that people have already mentally pocketed that cut and would have turned on Tuesday night's budget looking for something more to ease their intense cost-of-living pain just now.

The energy rebate delivers that, giving every household $75 in four quarterly instalments when their electricity bill arrives.

More significantly though, what the energy rebate is supposed to deliver, for the relatively small budget price tag of $3.5 billion over two years, is the mechanical impact this subsidy will have on the measured inflation rate.

Banking on inflation falling

Chalmers is backing the Treasury's forecast that this measure will help take three-quarters of a percentage point off inflation this year, and half a percentage point next year.

The treasurer told parliament on Tuesday night that: "Treasury is now forecasting inflation could return to target earlier, perhaps even by the end of this year."

That is, the government is resting its economic credibility — and for that matter, much of its political future — on inflation falling to below 3 per cent by Christmas.

That would put it in the range of the Reserve Bank's 2-3 per cent target and thus leaves it open to the central bank to cut rates much earlier than it has been recently suggesting it would.

Early enough so that it could be cutting rates before the federal election, which is due to be held by May next year.

Budget paints an alarmingly weak picture

There was a time when economic management was driven heavily by the shape of the budgets. All that talk about budget surpluses as a sign of good management; about the importance of budgets being back in the black.

That is still important to the budget watchers. And Chalmers delivering two surpluses in a row is supposed to appease the demands for the budget not to be too expansionary, even if the forecast for the next few years shows a deterioration.

But for the electorate in the broad, the most conspicuous marker of good economic management after the last couple of years of punishing rate and price rises will come from the central bank, not the government, and it's a signal that rates may have at last peaked and are on their way down again.

The risks in the strategy are significant: all sorts of shocks can hit the inflation number.

And the picture of the economy painted in the budget papers is alarmingly weak.

As Chalmers told the House of Representatives, the economic outlook is "framed in fraught and fragile global conditions".

Domestic economic growth of just 2 per cent will be built on tepid household spending and relies on the flow-on of strong public sector spending by both federal and state budgets, including a very big spend on infrastructure.

There is some more limited cost-of-living support: things like more rental assistance for those on low incomes, a freeze in the cost of medicines and the already announced changes to student loan indexation.

But given the stress households have been under, it is hardly generous.

Instead, the third Chalmers budget is one built on a hope that the government gets more time to fix the long-term problems if it can just survive the political stress of an electorate living on the financial edge for another year.

A mountain of problems that can't be solved soon

The budget doesn't read like one where the cabinet put a list together of disgruntled people or interest groups the government wanted to appease. Lots of interest groups will be very unhappy. There's not a lot of extra cost-of-living relief for those doing it the hardest, for example, nor any adjustment to income support payments which currently keep millions of Australians in poverty.

It is a budget that acknowledges it is facing a mountain of problems that just cannot be solved any time soon — like housing.

The Greens charge that the multi-billion-dollar housing package the government announced on the weekend, and included in the budget, actually contains no more money than already announced.

Probably true, but housing is a classic example of just how hard it is to turn around major structural problems in the economy in anything less than several years.

And the budget continues the strategy of chipping away at those issues as far as possible. For example, even with another increase to the Commonwealth Rental Assistance payment, it's still nowhere near the amount required to make a significant difference. But it's another step to getting there

Given the focus on domestic violence in recent weeks, it's hugely disappointing that there is no major injection of funds into providing front-line legal services, for example, for women fleeing violence, nor much for Indigenous communities.

Much of the structural change in the budget could well go unnoticed, mainly revolving around the burgeoning care economy, including changes to the NDIS, child care and aged care sectors.

In March, the government introduced legislation into the House of Representatives to start the task of addressing the blowouts and problems in the NDIS. It was only revealed on Tuesday night that the changes to the way NDIS packages would be structured in future will now be the budget's biggest saving: $14 billion worth over four years.

However, this saving will be largely offset by other spending in the NDIS.

The second measure the government wanted to focus attention on was the still a little vague, but pretty expensive, Future Made in Australia initiative.

It promises to spend $22.7 billion over the next decade on an industrial transformation centred on renewable energy and a net zero future and shiny new areas of the economy, like green hydrogen and critical minerals.

There's $6.7 billion in the form of a hydrogen production tax incentive for renewable energy and a $7 billion critical minerals productive tax incentive.

But just how the "national interest framework", which is supposed to govern all the taxpayer investments in this area, will work is still a little unclear — though it will be under the overall control of the Treasury.

Like the question of the cost of living, which will ultimately hang on decisions of the Reserve Bank, the success of this policy is ultimately out of the government's hands and reliant on business coming up with the net zero goods.

Laura Tingle is 7.30's chief political correspondent.