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Tax cuts and surplus to headline pre-election Budget

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Treasurer Josh Frydenberg will present another round of personal income tax cuts and promise the first surplus in more than a decade when he hands down the federal budget tonight.

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Low and middle-income workers earning up to $90,000 a year will be given an annual boost of around $1000, on top of tax breaks they received last year.

“Average families can expect out of this budget that their cost-of-living pressures will be eased, that there will be more money in their pocket,” Frydenberg told reporters in Canberra.

“The Coalition believes that every Australian should earn more, and that every Australian should keep more of what they earn, and that will be reflected in this budget tonight.”

The government wants its tax cuts legislated this week, before parliament is dissolved ahead of the federal election next month.

South Australian independent senator Tim Storer is open to supporting the tax breaks, but says the two-day timetable will be a stretch.

“I think it’s a significant ask,” he told ABC radio.

“It’s up to them to try and manufacture within this short period a reasonable argument for implementation of what they actually announce tonight.”

More than four million low and middle income earners are expected to benefit from the fresh round of tax cuts, while there will also be relief for those earning as little as $37,000 and as much as $126,000.

Frydenberg said the forecast budget surplus – the first in 12 years – was no accident.

“It’s the product of responsible decisions and an economic plan that is working,” he said.

The budget comes just days out from Prime Minister Scott Morrison calling a federal election for May 11 or 18.

Labor has already flagged it will deliver its own economic statement later in the year if, as polls suggest, it wins the election – rendering the budget mostly redundant.

However, the Opposition has signalled it will deliver bigger and fairer tax cuts, and put more money into schools and hospitals.

Morrison said the budget will be about building a stronger economy to secure Australia’s future, including hospital funding at record levels and guaranteed support for Medicare.

He rejected suggestions the budget was about buying votes, saying Commonwealth spending would be at its lowest growth rate in 50 years.

CommSec said payments in the eight months to February were about $2.9 billion less than assumed by the government, with revenues tracking very close to forecasts – effectively showing the budget was already in balance.

It is expected the government’s already-legislated income tax cuts will be brought forward, cash payments provided to pensioners to cover power bills, and billions set aside for road and rail projects and subsidising new drugs.

Labor leader Bill Shorten says it won’t be an economic document.

“It’s a political leaflet by a government asking you to forget the last six years of division and disunity,” he told reporters in Canberra.

“The scepticism level is high.”

Welfare advocates and economists are calling for an increase to the Newstart unemployment allowance, while the business sector is looking for a boost in funding for vocational education, training and apprenticeships.

– AAP

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