As the acting leader of his party, Fadden became the "de facto" deputy prime minister and joined the Advisory War Council. He was sworn in as Treasurer on 28 October 1940, succeeding Percy Spender, and presented his first budget less than a month later on 21 November. The budget featured increased levels of spending due to the ongoing war, offset by significant increases in taxation – including a reduction in the tax-free threshold, increased company taxes, and a tax on undistributed profits. In presenting the budget, Fadden noted that it brought about "the heaviest financial imposts ever placed upon the people of Australia". It was highly unpopular among the general public, which up until that point had perceived the war to be still quite distant. The independent MPs contemplated voting with the opposition to reject the budget, but after negotiations and some amendments it was able to be passed, allowing the government to continue in power.