Treasurer Jim Chalmers is putting the finishing touches to his first budget which he says will deliver on Labor's election promises while being "sensible and suited to difficult times".
While the Morrison government handed down an early budget in March, the election win for Anthony Albanese's Labor team on May 21 meant it was not delivered.
Since the election, Dr Chalmers and Finance Minister Katy Gallagher have been plugging "wasteful" coalition government promises into their calculators.
At the same time, strong commodity prices and a lower than expected spend on welfare payments due to the low unemployment rate have shored up the budget bottom line.
However, Dr Chalmers has warned Australians the savings found in the "rorts and waste" audit and the windfall from commodities still won't allow a big spending budget.
Budget deficits are expected over the next four years.
He will also be seeking to ensure modest cost of living relief does not lead to higher inflation.
The main areas of pressure on spending are aged care, disability services, health care, defence and meeting rising borrowing costs, with government debt heading towards $1 trillion.
The cost of servicing government debt is expected to grow by 14 per cent each year in the next four years, NDIS spending by 12.1 per cent, health by 6.1 per cent and defence by 4.4 per cent
"We don't have a lot of room in this budget to spray money around unnecessarily," the treasurer says.
The government also faces major costs stemming from the floods in three states, the impact of the war in Ukraine on petrol prices, and uncertainty around supply chains.
Following talks in the United States with his counterparts, Dr Chalmers came back with further bad news about the world "tiptoeing a narrowing and more perilous path when it comes to the prospect of another global downturn".
"Our best defence against uncertainty around the world is a responsible budget at home ... a sensible, solid budget suited to the difficult times that we confront."
Labor has maintained its lead over the coalition since the election across published opinion polls, while Prime Minister Anthony Albanese's personal rating has held in the high-50s.
The government will be hoping to keep this trend going by delivering on a range of election promises.
These include gradually raising paid parental leave from 18 to 26 weeks and spending $5.1 billion over the next four years to make child care cheaper.
As well, aged care will be overhauled to the tune of $2.5 billion, while medicines will be made cheaper by cutting the PBS general co-payment to $30.
Fee-free TAFE and extra funding for school upgrades and student wellbeing are expected to be included in the education budget.
While tax reform was not on Labor's election agenda, Dr Chalmers is aiming to bank almost $2 billion in improvements over four years by making multinationals pay their fair share.
What will be closely scrutinised is how many of the coalition government's road and rail projects and a range of suburban and regional grants schemes are scrapped or have funds reallocated elsewhere in the budget.
However, the already-legislated stage three income tax cuts are expected to be spared from the treasurer's hatchet.
The coalition is expected to focus its criticism on a lack of action over the cost of living.
