The Albanese government's economic credentials will be put to the test as it hands down its first budget amid far from ideal conditions.
The Labor government has some choppy economic waters to navigate, with soaring inflation prompting the fastest rate hiking cycle in decades.
While households are hurting, Labor is wary that generous cost of living relief would only fuel inflation and make the Reserve Bank of Australia's job of taming inflation even harder.
Government finances are also in bad shape after pandemic-era spending, although surging commodity prices have provided an unexpected boost to the budget's bottom line.
But the budget is still in structural deficit, and the government says it needs to find more money to fund five fast-growing areas of expenditure: defence, the NDIS, health, aged care and servicing interest on ballooning government debt.
The floods in southeast Australia will also weigh on the public purse, with $1.4 billion in commonwealth funds already spent on payments for flood victims.
It's these compounding pressures on Tuesday's budget that have prompted Treasurer Jim Chalmers to call for a "national conversation" on tax reform and budget repair.
So far, stopping multinational tax avoidance is the only tax reform on the agenda, but the government has also been under pressure to dump the stage three income tax cuts.
The tax cuts would offer tax relief to middle and high-income earners at a cost of almost a quarter of a trillion dollars over 10 years and aren't due to come into force until 2024.
Labor has ruled out changes to the tax cuts in the October budget.
The government can also tidy up the bottom line by cutting spending, and it's taken an axe to coalition projects it deemed wasteful.
Finance Minister Kay Gallagher says around $21 billion worth of savings and money has been found, which will be redirected into other areas.
Examples include the retrieval of $6.5b from infrastructure projects to better align the investment with construction market conditions.
The opposition has raised concerns about changes to infrastructure spending, and say some re-profiled spending has been funnelled into equally problematic projects, such as the Suburban Rail Loop in Melbourne.
"It doesn't pass a cost-benefit analysis, it's not recommended by Infrastructure Australia, it's been condemned by the auditor general in Victoria," shadow treasurer Angus Taylor told Sky News.
"These are not the sort of projects that make sense."
Mr Taylor also said Labor needed to use its budget to prove it had a plan to lower the cost of living.
"Cost of living pressures are going to intensify. Real wages are not going to improve in any material way."
Mr Taylor said Labor had been gifted the lowest unemployment rate in decades, economic growth of more than three per cent and an improving budget bottom line by the coalition.
