Peter Costello is just like Santa on steroids

This year you get an unexpected handout; next year someone else attracts the Treasurer's eye.

This is government by whim. None of the pressing, structural problems in our tax and payments system have been addressed.

The high marginal tax rates are still there, penalising success rather than rewarding it. Single parents and second earners are still being hit by the double whammy of high tax rates and reduced family payments when they move from welfare into work or from part-time to full-time employment. Despite making it easier to file a tax return online, the tortuous complexity of rebates, offsets, allowances, expenses, payments and benefits that drives three-quarters of Australians to use tax accountants is almost untouched by this budget.

And the rickety structure of family payments, the legacy of a dozen piecemeal, fiddling budgets, remains triumphantly in place. No sane government would devise a system such as this if it were starting from scratch.

The Treasurer flagged this as a budget for families and it is true that families on modest incomes - the much-hyped battlers - do have much to be grateful for. They are showered with Family Tax Benefit Part A and Part B payments.

They get the Child Care Benefit and will also now receive the newly tweaked Child Care Rebate. They may qualify for Low Income Tax Offset, or super co-contributions, or help with their dental bills, or that one-off lump-sum for carers. But what he didn't say is they still have to pay an awful lot of tax.

A family living on a $50,000 income is still paying $9,600 income tax and $750 Medicare levy, even after the latest tax cuts. But if families such as this didn't have to pay so much tax, they wouldn't need so many handouts.

One day these battlers will realise that they are paying for their own handouts, that what Centrelink doles out, the tax office takes away, and that we are all cross-subsidising each other's welfare perks.

Costello does not believe that day has yet dawned, which is why he continues to hand down budgets driven by one overriding principle: the belief that with a big enough surplus, it really is possible to fool enough of the people enough of the time to get yourself re-elected.