Australia’s on-again, off-again budget emergency is on again. But this time it’s real, it’s lurking just around the corner of the four-year budget period and it’s worsened by the unaffordable promises of the new government.

AUSTRALIA has been better at economic reform than most developed countries. It's no coincidence that Australia is one of only a handful of developed countries to have enjoyed more than two decades of recession-free economic growth.

Early in the life of any new government, impressions are formed that can be hard to shake. The new Abbott government seeks to be defined by silence: an understandable refusal to be taken hostage in the desperate battle of 24-hour news coverage. Tony Abbott is attempting to take government out of the lounge rooms of everyday Australians, to make them feel, in the words of his mentor, John Howard, "relaxed and comfortable".

Amid the controversy about alleged American eavesdropping on German Chancellor Angela Merkel's mobile telephone discussions and the collation of data about global mobile phone traffic, a much quieter conversation is going on here in Australia.

As Labor begins the task of charting a course back to government it now has, as it did following the election defeat of 1996, a choice of two roads. The high road of developing responsible policies in the national interest always looks steep and arduous, especially when the low road of political populism beckons, littered with the cheap allure of support by interest groups opposed to reform.