The pandemic has stress-tested the economic principles that have shaped the responses of Australia’s Coalition parties for at least the past two decades and has found them unfit for purpose.

The American comedian Groucho Marx once quipped that he had his principles and “if you don’t like them … well I have others”.

Marx made his last movie in 1949, but he could well prove to be the ghost writer for Treasurer Josh Frydenberg’s budget speech next week.

Because we are certainly going to hear Mr Frydenberg’s other principles – the ones diametrically at odds with the “debt and deficit disasters” he and his colleagues have railed against right up until COVID-19 struck.

The oft repeated and superficially valid explanation for jumping off the debt truck used in campaigns to ridicule Labor is that the world changed when a “once in a 100-year pandemic struck”.

It is certainly true that threats to the health of the entire planet’s population diabolically worsened within a matter of months.

That was and is a dramatic, unavoidable change.

But those who believe in small government, balanced books and the rule of market forces left unfettered as much as possible certainly faced an acid test and their principles failed them.

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These fiscal conservatives embraced the solutions of big government, market intervention and extraordinary spending plunging the federal budget into massive debt.

In so doing they saved millions of jobs and gave critical support to those who lost them.

So the very arguments the Liberals used against the Rudd and Gillard governments in dealing with the Global Financial Crisis have been exposed as opportunistic and wrong.

The treasurer at the time, Wayne Swan, says “everything they argued and articulated was a fraud”.

Peacocking: The government is preparing a spending splurge.

Swan’s spending led to net debt of $226 billion (or 14 per cent of the economy). The net debt now is close to $500 billion dollars and in the vicinity of 44 per cent of Gross Domestic Product.

Last week the Treasurer assured us the sky is not about to fall in, and while he will begin reining in his spending, he will still be borrowing and spending much more than Swan dreamed of.

The Treasurer says paying down the debt has never been cheaper because interest rates are also at historic lows – near zero, and are forecast to remain there for a decade.

This spending has the same purpose as Labor’s did and that is to grow the economy, create jobs and stimulate demand; this in turn will see more people off welfare and paying taxes.

The true believers in small government and no debt say this is a massive risk with no guarantees; the bubble will not burst and as history shows, lead to financial collapse and even a depression with mass unemployment.

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But this is a calculated risk both sides of politics now say is worth taking. They point to Australia’s economic recovery – patchy and all – as it may be as proof of this.

In fact there is a strong argument the government’s foreshadowed withdrawal of about $90 billion of spending is a bigger risk to jobs and growth.

But PM Scott Morrison and Frydenberg can’t avoid the charge that they have stolen Labor’s clothes and in so doing, have seen their old principles fall into a credibility hole.

The Treasurer maintains “this government’s core values have not changed”. Well, he will need to spell out which ones they are, because they are not the ones that traditionally distinguish the Liberals from Labor.

That, of course, is probably the whole idea, going to an election with the sort of austerity Joe Hockey tried to foist on the nation in the 2014 budget would be just as repugnant today as it was then.

Labor is not convinced this conversion of their opponents to a bigger role for government is lasting and it is clear shadow treasurer Jim Chalmers intends to keep reminding voters of this.

Before then, the government will need to change its thinking again, this time on providing more purpose-built quarantine hubs around the nation.

Seeking more inspiration from Groucho Marx could be very useful, after all, a sustained economic recovery can only be achieved with a safer way of opening our international borders.

Paul Bongiorno AM is a veteran of the Canberra Press Gallery, with 40 years’ experience covering Australian politics