What to expect in the Budget
TAX cuts are the big talking point ahead of Tuesday's Budget as the Federal Government prepares to deliver financial relief to households battered by the rising cost of living.
It will be the last Budget before the next federal election - due before May 18 next year - and expert opinion is divided over whether we can expect a traditional big-spending election Budget or restraint to display good economic management.
Treasurer Scott Morrison set the scene for tax relief last month by announcing the government would scrap plans to increase the Medicare Levy from 2 to 2.5 per cent.
Further tax cut announcements are tipped for the Budget, along with increased infrastructure spending and extra funding for aged care.
AMP Capital chief economist Shane Oliver said "it's going to be a feel-good Budget", boosted by recent government revenue rises from higher company tax collections.
"The numbers will look better and we will have tax cuts, which will be skewed towards low and middle income earners," he said.
The timing of the tax cuts was uncertain, Dr Oliver said, and might be held back until closer to the election - perhaps January next year.
However, don't expect much more than $10 or $20 a week because the Government remains committed spending less than it earns by 2020-21 after a record long streak of Budget deficits since the Global Financial Crisis.
Dr Oliver tipped extra funding for health and education. "And there will probably be an increase in funding for financial regulators, particularly ASIC, given the (banking) royal commission," he said.
H & R Block director of tax communications Mark Chapman predicted a generous Budget, but perhaps with some restrictions on work-related tax deductions.
Small businesses were likely to lose some tax incentives but should still be looked after, Mr Chapman said.
"I don't think there will be much in the way of bad news," he said.
"There will be tax cuts. They will go out of their way to avoid inflicting pain on the taxpaying population."
CommSec chief economist Craig James said people should expect tax cuts and more infrastructure spending, although the economy was in good shape and didn't need any more stimulus.
"We do need to keep spending on infrastructure because we do have a growing population and need the roads, bridges, schools and hospitals that come with it," he said.
"I don't think there's going to be giant handouts. The Treasurer watered down expectations that he was going to play Santa Claus. I think the government wants to continue to portray its responsible approach."
Families with two income earners will enjoy double the tax relief if income tax cuts are announced in the Budget as expected.
The Pizzino family will be among them. Husband Mark works in construction, while wife Pietra is juggling being a full-time mum of three children with study and part time work in the accounting sector.
Mrs Pizzino said she was relieved that the Federal Government last month scrapped plans to increase the Medicare Levy from 1.5 to 2 per cent, and would be happy with any other tax cuts to help offset higher living costs and low wages growth.
"Any tax cuts are more than welcome and would help us more than what they realise," she said.
The Pizzinos are also watching out for childcare announcements. "We have a little one we would be looking to put into child care later this year."