Good morning Tylko,

Jim Chalmers is just days away from releasing an ‘intergenerational equity’ budget with huge implications for Labor and the nation. Negative gearing and CGT changes, taxes on trusts, and a cash splash - just when the Reserve Bank is warning governments against handouts - are all on the way.

But the question remains if the Treasurer can see any pathway back to a surplus? 

And can this budget really deliver on big promises around spending restraint and public service efficiencies? 

Before next Tuesday’s Budget, Labor ministers will have the popcorn out on Saturday night as they watch the Coalition-One Nation brawl in Farrer.

Pauline Hanson’s populist party is expected to come out on top, but Angus Taylor is making it clear he is prepared to go toe-to-toe with her. Taylor has revealed in The Australian that the Coalition will cap net overseas migration in line with new home completions under a tough new immigration policy.

The plan is at the heart of Taylor’s first budget-in-reply speech next Thursday, in which he will ramp-up attacks on Anthony Albanese for “pitting Australian against Australian”.

Taylor might be in for a drubbing on Saturday night in Farrer. But he’s playing a long game and betting Chalmers’s Tuesday budget will help him revive the Liberals’s fortunes.

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