Polls are consistently predicting a wipe-out for the Coalition at the election expected later this year.It is no small irony that Prime Minister John Howard will now have to turn to his deputy and erstwhile leadership rival Peter Costello to pull him out of the Government's current poll woes.The May Budget will now be absolutely crucial to the Howard Government's bid to stop the Kevin Rudd juggernaut and bring wavering voters back to the Coalition fold.
The resignation of Senator Santo Santoro from the ministry and from the Parliament over his inexplicable failure to disclose dozens of share trades has been a humiliation for the Government.
But it is also symptomatic of a deeper malaise within the Coalition and the appearance at least that it has lost its way.
Wipe-outWith polls now consistently showing a wipe-out for the Coalition at the election - expected in either October or November - the pressure on Treasurer Costello to set the correct and positive policy settings for the next six months is now enormous.
The task for Mr Costello is made even more difficult because, to be blunt, he has to buy votes without spending so much that he frightens an already twitchy Reserve Bank board into pushing up interest rates again.
Budgets over recent years have become more and more politically calculated, with tax and family payments changes aimed at securing sections of voter demographics.
And the more successful the Government has been, the more is expected at each Budget.
Another balancing act Mr Costello has to perform involves not alienating voters who will miss out in the Budget - in other words, maximising the winners and placating the losers.
But the Treasurer will also deliver his 12th Budget knowing that life would have been much easier for him had Mr Howard decided to leave politics late last year - on a high and giving him a year or so to put his stamp on the Prime Ministership.
Mr Costello believes that had there been a smooth leadership transfer, the contest would have been between himself and Kim Beazley - the old versus the new.
Now, barring any sudden decision by Mr Howard to hand over the leadership soon, the contest will still be between the old and the new, only it will be between a ready-to-retire John Howard and an energetic Mr Rudd.
The past few weeks of the politics of credibility have backfired badly on the Coalition, which has tried to expose Mr Rudd's shortcomings and character flaws, but has exposed deep-seated problems on its own side instead.
After two forced and humiliating resignations of Queensland Senator Santoro and Western Australian Senator Ian Campbell, the Government is looking as if it cannot manage its own affairs.
Scrutiny of Kevin Rudd is both legitimate and absolutely necessary, given that the MP of only eight years' standing could be running the country in six months.
But the problem with the attacks is that they have been both overblown and misguided.
The key to the success of defeating Mr Rudd will be to expose the deep ideological divisions within Labor ranks which the new leader has successfully papered over.
Labor is vulnerable on all manner of fronts, from energy and the environment to social, family and immigration policy, but is prepared to remain quiet in the hope of returning to the Treasury benches after a decade in the wilderness.
Mr Howard is always at his best with his back against the wall, and he has enormous experience and government resources to draw upon.
It is still a fifty-fifty chance that the Howard Government will be returned, but time is running out to turn the tide of voter opinion that it may be time for a change.
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