THE budget is likely to affect the RBA's thinking on interest rates.
That's not all there is to it, of course.
When the RBA next moves interest rates, very likely upward, one question will dominate the decision: what level of interest rates will be needed to prevent an upsurge in inflation from being a realistic threat.
That in turn will hinge on the strength of the economy.
A strong economy generates more employment, more wages growth, more pressure on prices, than a weak one.
So the weaker the economy, the less need to restrain it using higher interest rates.
Futures market pricing shows an expectation that the cash rate will stay at its over-50-year low of 2.5 per cent until well into 2015, with a rise to only 2.75 per cent priced in for the end of the year.
In other words, the economy is not expected to pick up enough pace to strain its productive capacity - including its capacity to supply additional workers as the economy growth.
That's not an environment calling for restraint from higher interest rates.
But that could change.
A lower exchange rate, an unexpectedly slow wind-down of the mining investment boom or surprisingly strong pickup in housing construction or business investment in the rest of the economy could all bring a rate hike, and then some more, closer.
But the budget itself is likely to push it further out.
That's even though, in terms of total dollars and cents, the direction of the budget will be trivial over the coming year or so.
Policy decisions since the mid-year review of the budget in December improved the budget bottom line by just under $2 billion in the coming financial year, $6 billion in 2015/16 and just over $10 billion in 2016/17.
That sounds like an awful lot of money, but it works out to only 0.06 per cent of gross domestic product in 2014/15, rising to 0.5 per cent in 2016/17.
But the composition of the change probably works against growth in the coming year or so.
The mining tax, for example, was to be paid by mostly foreign-owned mining firms, and its intended abolition will probably make no difference to what they spend in Australia.
Abolishing the carbon tax and associated measures to promote renewable energy will reduce spending, by slowing the inevitable transition away from older, carbon-burning technologies.
On the other hand, tax and welfare measures cutting the spending power of lower-income households will reduce spending, probably dollar for dollar.
Perhaps more importantly, it looks as though the budget has had a significant negative impact on consumer confidence.
The Westpac/Melbourne Institute consumer confidence index on Wednesday will most likely confirm that.
If a big step down in confidence is confirmed, both the economy's recovery to "trend" growth and the return of interest rates to more normal levels will be pushed back further.
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