"I've always found that if you get the economics right, the politics will follow" announced Peter Costello as he delivered his 12th budget. With elections looming and the Coalition behind in the polls the Government has used the budget to affirm its economic proficiency while simultaneously enhancing Peter Costello's claim to take over from John Howard. With $31.5 billion in personal tax cuts over four years, lower income and part-time workers will receive a larger portion at first followed by the higher income earners in 2008. Politically this strategy is aimed at winning the votes of low to middle income earners considering that past budgets have been criticised for being skewed towards the rich. Economically the result will take pressure off inflation and increase labour supply to the economy. Peter Costello has called this budget his "education revolution" which is a direct quote from Kevin Rudd whom he joins in celebrating education as an investment in the future. The reform is politically quite brilliant as it overcomes the centerpiece of Kevin Rudd's economic policy by introducing a Higher Education Endowment Fund. Together with spending on education, health care, child care, road, rail and the environment the budget should boost the Howard government in the polls. Concurrently, maintaining a budget surplus, a forecasted rise in GDP next year, manageable rate of CPI at 2.5% all without putting any upward pressure on interest rates and expanding the economies production capacity. It may be a little early, but it seems unlikely that Peter Costello will deliver a 13th budget. Comments and Suggestions welcome. Avneesh Manik.