By Mark Kenny

This article was originally published by The Canberra Times.

John Howard's advice lacked the caustic irony of observing "there are no atheists in foxholes", but he helped the Morrison government's own religious conversion - to the gospel of John Maynard Keynes.

Its debt-financed 2021-22 budget has been praised for striving against unemployment and for directing its borrowed billions into yearning social needs as diverse as the NDIS, aged care, mental health services, childcare, and women's security. Even its tax cuts (albeit one-off) were restricted to the bottom half of the income scale.

Meanwhile, net debt nudging $1 trillion in 2025 to pair with combined deficits of $342.4 billion is all perfectly manageable.

Asked to explain why this is not a treasonous betrayal of the conservative promise to balance budgets, diligently pay down debt, and never ever meet recurrent obligations out of borrowings, Treasurer Josh Frydenberg again cited his mentor who had told him last year, "during times of economic crisis, there are no ideological constraints" (not pithy, but handily clear).

Perhaps we can call this crypto-Keynesianism - the recession-proofing levers only we can be trusted to pull?

In any event, the Liberal grandee's permission clearly freed Frydenberg in two ways - first, from his party's horizon-narrowing fiscal dogma, and second, from the requirement to create losers, as is a Treasurer's unhappy lot in all but the most propitious of times. Or an election year - take your pick, because 2021 is supposedly neither.

Frydenberg duly produced a plan that the ABC's Andrew Probyn branded "the hot chocolate budget" because "everyone's a winner, baby, that's the truth". Perhaps you had to be there?

But really, I hear you protest, where's the risk? How hard can it be giving money away? Well it turns out, that depends on who your opponents are.

We can say this now because, for our sins, we suddenly have two strikingly analogous budget-slash-political crises to compare. The GFC and the pandemic have come only a dozen years apart, so they are within the parliamentary careers of some of the current actors - Scott Morrison and Anthony Albanese, for example, and by 2010 Frydenberg was there also.

In 2008, when the Rudd government first glimpsed the collapse of the global financial system, its new treasurer, Wayne Swan, was similarly licensed to ditch the rigour and take the path of least resistance. Famously, Labor was urged by the normally Grinch-like Treasury to shovel cash into the economy quickly as prophylactic stimulus with the words, "go early, go hard, and go households".

The trouble was, Swan and his boss Kevin Rudd had just won an election on an uncommonly explicit promise of fiscal conservatism. Indeed, this had been central to quelling voter perceptions of Labor's tendency to blow surpluses. Rudd had conspicuously underspent Howard's 2007 envelope of election promises while cheekily declaring "this reckless spending must stop".

To be suddenly throwing the switch to stimulus just months out from delivering a surplus (already announced) meant forsaking all of that hard work and validating the recidivist tropes written by its political opponents - Labor cannot manage money, will never deliver a surplus, will saddle future generations with debt, yada, yada, yada.

Rudd and Swan saw this risk but faced little choice. They began by sending cheques to all and sundry to keep consumers spending, and got cracking on major infrastructure programs such as the (ferociously criticised but actually effective) $17 billion school halls program.

In economic terms, this stimulus worked a treat. In political terms, however, it was ruinous. Voters had happily trousered the cash, but because it had worked, there was no recession. That meant no gratitude for a crisis averted. Even Rudd's earlier warnings began to look shrill and exaggerated. The debt overhang? That remained.

Cue Tony Abbott's pithily expressed "debt and deficit disaster" which connected ultimately because, like all the best political attacks, it reinforced pre-existing prejudices - in this case, voter reservations about Labor's economic competence.

Dishonestly, the Coalition never conceded Labor's spending - much smaller than today's fiscal flood, by the way - had been required. Worse, any imprecision as a function of hasty program design (cheques to dead people, wastage in the schools program, deaths in the home insulation industry), became damning evidence of profligacy and incompetence.

Where is that conservative/media outrage now, after untold millions were channelled to healthy companies via JobKeeper only to turn up in record profits, bigger shareholder dividends, and fattened executive bonuses?

A dozen years after the GFC, and right on the cusp of delivering his own first surplus (again already announced as "back in the black") the Treasurer would again have to forget about fiscal bragging rights.

To his credit, Frydenberg has leant into his new work. The budget he announced last week was a wholesale repositioning of Coalition policy, and one in which centre-right shibboleths of fiscal rectitude have been benched.

Avoiding intergenerational unemployment is a most worthy goal - and was, incidentally, precisely Swan's motive a dozen years earlier as he warned of deep social and economic sequelae.

But there are glaring omissions in Frydenberg's formula, such as not making fresh provision for free-standing fresh-air quarantine facilities beyond Howard Springs, and not therefore hastening the earliest return of qualified open borders.

Even on purely economic grounds, two sectors in particular could have been given hope by staged border opening, if not partially resuscitated, and both are major employers: tourism/hospitality, and universities.

It beggars belief that universities - the fourth-largest export earner for the country, and the knowledge economy driver in which Australia has enjoyed a global competitive edge - have been so studiously disregarded.

Turns out there is ample room for ideology in a crisis after all.

Back in 2008, the American economic scholar Jeffrey Frankel lamented the conservative double standard of hawkishly professing market purity over government involvement until such time as there's a crisis, when suddenly a public bailout becomes the answer. "They say there are no atheists in foxholes", he began, "perhaps, then, there are also no libertarians in financial crises."

Quite.

Mark Kenny is a professor at the Australian Studies Institute ANU and host of the Democracy Sausage podcast.