Every government budget, even the most generous, has winners and losers. That's politics. The interests of one group are bartered against the interests of another group. Scarce resources meet infinite wants.
In this light, the Abbott Government's rolling series of policy retreats are a very bad sign.
How will the losers in the 2015 federal budget react now they've seen how completely the Government has caved in to those who lost in the 2014 budget?
The lesson of the last 12 months is this: dig in your heels and eventually the Government will come around.
Last week Industry Minister Ian Macfarlane announced the latest backdown: the Government is not going to abolish Australia's car subsidy program after all.
Exactly what Macfarlane's announcement meant was unclear for some days. The Government has apparently decided that considering a) it can't get car subsidies legislation through the Senate, and b) the car companies have decided they're going offshore anyway, there's not much point continuing to fight.
Treasury has been briefing that the cost to the budget of this backdown will be just $100 million, not the $500 million suggested by the Adelaide Advertiser last week.
But financial cost isn't the point.
What matters is the signal it sends to any rent-seekers at risk of having their privileges taken away. Don't give ground. The Government will give up.
Indeed, the last few months of barnacle scraping has exposed more than a few weaknesses in the Government's hull.
The Government has been explicit that it will now defer to the Australian Medical Association on any and all reforms to Medicare, as Mike Steketee pointed out on The Drum on Thursday.
The Australian Medical Association is one of the most entrenched special interests in the country. Abandoning the copayment is not just a huge win for them on a policy level, but a big boost for their political influence.
The Government watered down its welfare reform proposals, again in response to a "widespread backlash".
It looks to be trying to work an about-face on the proposal to change how pensions are indexed. Never mess with pensioners. They have real clout.
And on Monday Christopher Pyne divided the apparently indivisible relationship between research funding and university deregulation.
Imagine what these policy retreats are teaching the crossbench.
When Jacqui Lambie dug in her heals on the issue of defence force pay, the Prime Minister said he would not submit to "blackmail". But eventually the blackmail worked. The Government submitted earlier this month.
The Government has to negotiate with the crossbench over and over. If something is truly non-negotiable it should stay truly non-negotiable.
Lambie, a neophyte without a party, managed to stare down the Government all by herself.
Now Canberra just waits for Lambie's next line in the sand.
But let's return to the car subsidies question, because it goes to the heart of the Government's policy approach.
When the decision to end these subsidies was announced in the May 2014 budget, it was seen as part of a trio of decisions — along with the decision not to bail out Qantas, and a similar decision not to bail out the fruit manufacturer SPC Ardmona — that defined the Abbott Government's economic philosophy.
The Government's rhetoric could have been scripted by Milton Friedman. Recall what Abbott said when he decided against the Qantas bailout.
We do not believe in government by chequebook and we certainly don't believe in any normal circumstances that government should be playing favourites between competing private businesses.
Would the Government repeat such heady stuff today? I doubt it. Macfarlane sold the car subsidies announcement last week not as a temporary stay forced on the Government by a recalcitrant upper house, but as a concession to jobs and seats in South Australia and Victoria. No room for Friedmanism there.
With the release of the Intergenerational Report a fortnight ago, the Government has finally started to spell out the fiscal problem, and why it is important to get the budget back under control.
This is work that ought to have been done by last year's Audit Commission. Better late than never, I guess.
Yet the Government's recent decisions seem to fly in the face of that challenge, abandoning budget savings in order to chase the opinion polls.
On the one hand, the fiscal challenge has never been so great. On the other hand, the Government's willingness to pursue tough reform has never been so brittle.
And it has shown a weakness in resolve that every special interest in the country will target when the budget comes around in May.
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