Australian budget: Sweeteners for small biz, families

Treasurer Joe Hockey will present the Australian Budget tomorrow night. Photo / Getty Images

Joe Hockey and Tony Abbott have learned much from their near-death experience.

Their second budget is top-heavy on sweeteners for small business and families, without the sour taste of a Medicare co-payment or easing back on age pensions.

Savings measures are carefully targeted at multinational tax-dodgers, foreign investors, rich retirees, welfare cheats and foreign workers.

They will help overcome opinion poll findings that show voters believe the coalition favours the rich, corporates and and the wealthy who don't pay their share.

With seven million Australians living in rural and regional areas, a $5 billion fund for new ports and railways as well as targeted economic stimulus in poorer performing states will be an easy sell.

The budget's trajectory - for a surplus in 2019/20 - at least on paper remains in place. But it's a courageous projection, given the still-troubled global economy and a lack of clear direction about from where future jobs are coming.

And as millions of Australians have a crack at being their own boss, small business has been thrown a wealth of tax breaks and incentives to kickstart their cafes, accounting practices and internet start-ups.

There is no overt mention, like last year, of university deregulation or billions of dollars to be cut from state schools and public hospitals.

Having survived a Liberal partyroom spill in February, Abbott and Hockey have removed enough policy "barnacles" and rewritten the economic script to give them some political breathing space.

There are, however, still a number of challenges for the government.

Labor and the unions have baulked at the idea of ending paid parental leave "double-dipping" and will keep up pressure on the government over health and education - two areas which receive very little attention in the budget papers.

Savings measures, such as family tax benefits changes, from 2014 also remain in doubt.

Details of new arrangements for child care and the unemployed will be raked over for examples of "unfairness".

Hockey's statement to parliament that "things are getting better" could be talking about his political future as much as the nation's.

-AAP