By ABC's Barrie Cassidy

Photo: For some, the Prime Minister has always been an old-fashioned anglophile. (AAP: Lyndon Mechielsen)

At a time when it should be laying the groundwork for the momentous budget to come, the Federal Government is instead talking about distractions of its own making, writes Barrie Cassidy.

Bigots and knights, distractions and indulgences - what a bizarre and wasted week for the Abbott Government.

The last sitting week of the autumn session is a precious opportunity to lay the groundwork for the essential task at the heart of government - framing the budget and reforming the economy.

The budget is in need of repair and the road ahead is politically difficult. At this time every year, the community needs signals. It needs massaging. Governments need to meticulously explain the context of decisions to come.

Instead, the week was awash with talk of bigotry, the right to offend and insult, and whether returning to knighthoods is a good idea.

The Attorney-General, George Brandis, might have been technically correct when he said people have a right to be bigots. But as the chief law officer of the land, he then had a responsibility to painstakingly and in considerable detail talk about basic community values, common decency and the need for Australians to tolerate and respect one another.

Instead, the Minister allowed his blunt and confronting message to sit there in isolation.

The debate around changes to the Racial Discrimination Act likewise has left the community confused. It hinges on a worthwhile but essentially academic argument that needs to be carefully nuanced and explained.

Again, the public sees a government trying to enhance freedom of speech on the one hand, but seemingly making it more acceptable to offend, insult and humiliate on the other.

In the end, the Minister's draft exposure amendment is now on hold as much broader consultations are held. Shades of Christopher Pyne's ill-judged assault on the Gonski reforms?

The overall look coming out of Canberra is further damaged when the Finance Minister, Mathias Cormann, in the same week defers decisions on financial advice reforms. Again, the community backlash was underestimated.

Even the big banks were muted when the Minister indicated he might tweak the reforms that allowed advisers to sell products for a commission. Perhaps the banks felt that if they made a fuss, then the public would really smell a rat.

But the biggest distraction, and the biggest indulgence, was the return of knighthoods.

One school of thought has it that the announcement was made in part to wedge the Opposition Leader, Bill Shorten, given that his mother-in-law was about to become the first recipient of the restored honours.

But within 24 hours a much bigger wedge emerged when former prime minister John Howard declared the move would be seen as "somewhat anachronistic" even by conservatives, and that he would be unlikely to accept a knighthood even if offered.

Politicians are used to criticism. It comes with the territory. But they hate ridicule. Wednesday became Tony Abbott's worst day in the Parliament so far when the laughter directed his way even caused the Speaker to declare it disorderly.

In any case, restoring knighthoods won't help the monarchists. That debate - republicans versus monarchists - has laid dormant for many years, a situation that the monarchists should welcome. Reviving it in such a provocative way can't help.

It doesn't help the Prime Minister either. He has always had the reputation in the minds of some of being a somewhat old-fashioned anglophile. This will reinforce that.

The problem with the honours system is consistency and credibility.

Gough Whitlam stopped naming knights and dames. Malcolm Fraser took it up again. Bob Hawke ended the practice and now Tony Abbott has brought it back.

There's a pattern here. The system is adjusted according to the politics - or the political dominance - of the day.

Honours should be above politics, given out according to a community consensus. Not only did Abbott not consult the community, he didn't even take it to his own cabinet.

Those awarded the top honour should know that the recognition of their life's work is both bipartisan and consistent with past practices.

Thursday was the Government's last chance to get Question Time back on topic: on the budget and the economy. Instead, the Speaker named an Opposition frontbencher for the most dubious of indiscretions and another day was lost.

The Abbott Government is the first majority government in almost 40 years not to have had a honeymoon in the polls. Few seem particularly perturbed by that. They seem satisfied that it is very early days in the political cycle and that in any case incumbent governments can call on a natural advantage as elections draw closer.

But what if the bruising politics of the last several years has so trashed the brand, and so trashed the reputations of governments generally, that that is no longer the case?

Surely in this new environment governments should focus even more keenly on what really matters to people. If they don't, they'll start at a disadvantage.

In those circumstances, being behind in the polls at any stage would or should be a worry. The danger is that rather than being the early days, these could be the formative days.

Barrie Cassidy is the presenter of the ABC program Insiders. View his full profile here.

Forget the budget - let's talk knights and bigots - The Drum (Australian Broadcasting Corporation)