Finance Minister Mathias Cormann has dismissed the suggestion that his government has cash to splash on Australians in the federal budget because of a lucky windfall.
Treasurer Josh Frydenberg's first budget on Tuesday is expected to include fresh tax relief and a range of other sweeteners as well as a significant reduction in debt, with a federal election only weeks away.
Economists have forecast the government will have billions of extra dollars to play with than projected in its last budget update in December.
The extra revenue has come through higher commodity prices, which have meant companies paying more tax.
Treasurer Josh Frydenberg has promised the upcoming federal budget will target wage growth. Source: AAP
More Australians getting jobs has also helped, raising the amount of tax paid overall by individuals.
But Senator Cormann stressed the government has not simply got lucky and that its commodity price forecasts have been prudent.
Prices for commodities such as iron ore have been lower under the coalition than they were under the previous Labor government, he said.
"I completely reject the proposition of revenue spikes," the minister told reporters in Canberra on Monday.
"This proposition that somehow, we've been the beneficiaries of revenue windfalls, when we had to write down $180 billion worth of revenue that Labor had previously assumed out of our budget is ridiculous."
In fact, Mr Frydenberg is expected to announce the government's current net debt of about $370 billion will be wiped out within 10 years, The Australian reports.
The budget will see significantly higher surpluses while the deficit will be lower than the $5.2 billion forecast in the mid-year update, marking a $10 billion turnaround on last year's budget estimates, according to the paper.
Senator Cormann earlier all but confirmed the budget will include extra personal income tax relief, in line with the coalition's push for lower taxes.
"We've made the decisions in past budgets and budget updates in order to fulfil that commitment (of tax cuts)," he told ABC radio.
The most popular theory is that the government will bring forward tax cuts it has already legislated.
Personal tax cuts that cleared parliament in June are scheduled to kick off from this financial year, with further reductions in 2022 and 2024.
They will eventually save someone on an average wage of $85,000 about $540 annually, with the package costing $144 billion.
NAB says bringing the 2022 stage of the plan forward could cost between $6 billion and $7 billion, or 0.3 per cent to 0.4 per cent of gross domestic product.
Mr Frydenberg on Sunday announced $285 million to help almost four million Australian pensioners and veterans - but not people on the dole - cover their energy bills.
The budget will also include an extra $1 billion for at least seven freight corridors across Queensland, Victoria, NSW and Tasmania, he revealed on Monday.
The budget will be publicly released on Tuesday evening at 7:30pm, a few hours after the Reserve Bank of Australia's monthly board meeting.
Economists are expecting the board will keep the interest rate on hold at its record low of 1.5 per cent.
