Coalition struggling as early confidence fades

Australian Prime Minister Tony Abbott. Photo / Getty Images

For a while there, all appeared to be going to plan.

Australia was once again "open for business" and consumer and business confidence blossomed in the early days after Tony Abbott and the Coalition were swept to power.

Economic growth perked up to its fastest pace in about two years, consumers were spending again and the housing market appeared to be going from strength to strength.

But 12 months into the Government's first term, the economy is not looking so flash.

Unemployment has spiked at a 12-year high, beyond even the predictions of the previous Labor Government, while economic growth again slipped below its long-term trend of 3.2 per cent.

Critically, key elements meant to address the so-called "budget emergency" remain in limbo.

At least interest rates haven't increased, although if they did it would be a sign of an improving economic backdrop.

The Abbott Government has enjoyed some success.

Labor's carbon tax has gone and now households and business wait to see how much less they have to pay for energy.

The mining tax has also been abolished, but with a cost for small business through scrapped tax breaks, and a seven-year freeze on previously legislated increases to the compulsory superannuation guarantee.

Joe Hockey had to take some tough decisions in his first few months as Treasurer.

He blocked a United States takeover of grain handler GrainCorp, bringing into question the Government's "open for business" slogan.

The Government also presided over the flagged death of Australia's carmaking industry, refusing to offer more subsidies to foreign-owned General Motors and Toyota.

After chastising Labor for years over rising debt, Hockey found himself striking a deal to scrap the Government's debt limit with the Australian Greens, a party the Coalition once labelled "economic fringe dwellers".

But it is the Government's first Budget - criticised as unfair and breaking a list of election promises - where the Coalition has found few friends.

Initially, the Budget's tough measures - a A$7 ($7.85) GP co-payment, reintroduction of fuel excise indexation, cuts to health and education funding, changes to pensions and higher education deregulation - caused consumer confidence to tumble.

Some of the Government's problems in selling the Budget have come from its own hands, Hockey's especially.

But Abbott concedes in Hockey's biography - Not Your Average Joe - he should take some blame.

"My contribution has been to make your life harder than it would otherwise be by making a whole series of pre-election commitments that you've had to delicately tiptoe around," the Prime Minister told his Treasurer at a post-budget party.

Some might question: "That was delicate?"

- AAP