The treasurer, Scott Morrison, brought the Australian Budget to the forefront of everyone’s mind this week, warning government officials and the general public that tax increases could be on the cards.

But why?

Well the Senate (under the lead of Nick Xenophon) refused to back the Government’s controversial onmibus bill designed to cut Family Tax Benefits and unemployment benefits for young people. The money saved from this bill was to be put into childcare and the National Disability Insurance Scheme.

“If you don’t fund it (the NDIS) by getting welfare under control, you’ve got two other options, increase taxes or increase debt,” Mr Morrison told The Australian.

On Thursday, Morrison raised the topic of tax hikes again. This time, however, it was in aid of maintaining Australia’s AAA credit rating.

All of this has occurred whilst the government’s $50 billion company tax plan has been kicking around the Senate. The plan as presented by the government would give businesses tax cuts that would roll out over the next decade.

But the big question is: Is he bluffing?

To those on the outside, the veiled (and not-so-veiled) threats and warnings of tax hikes for the public certainly could be interpreted primarily as an attempt to get leverage over the Senate and push through the government’s proposed company tax plan and omnibus bill.

However, where there is smoke, there is fire. But everyone knows that tax increases are suicide for politicians looking for re-election.

Watch this space!

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