Cost of living front of mind in upcoming federal budget, PM says

Scott Morrison says the government will seek to ease cost of living pressures in the federal budget, but warns factors behind higher petrol prices need to be addressed at a global level.

Treasurer Josh Frydenberg will deliver his fourth budget on March 29 ahead of an expected May election, which opinion polls indicate the coalition could lose.

The budget is expected to include a slightly better than expected deficit, but debt heading towards $1 trillion.

The prime minister and Mr Frydenberg have been framing the budget around the theme of strong economic management delivering the jobs, services and national security that Australians need.

Mr Morrison says Australians are well aware the price of petrol – which is hovering around $2.20 a litre – is being driven up by the Russia-Ukraine war.

With some interest groups pressing for a cut in fuel excise – which adds about 44 cents a litre at the bowser – Mr Morrison won’t reveal what the government has planned.

But he told Nine on Sunday an excise cut might not make much of a difference given that the petrol price has already lifted from around $1.70 to $2.20 – more than the full cost of the excise.

He said the government would work with other countries to release fuel reserves and ease pressure on petrol prices.

“The things we can do, we do, and the things we can’t do anything about, well, we understand them and work with other countries around the world to try and relieve those pressures,” he said.

Mr Frydenberg has flagged further investment in defence to take the total military spend to just over two per cent of GDP.

The budget will also include a women’s economic statement, more funding for skills and manufacturing and a strong focus on the regions to generate jobs.

It remains unclear whether the government will extend the low and middle-income tax offset, which provides up to $1080 a year to 10 million Australians on an income of less than $126,900.

Finance Minister Simon Birmingham said the government would “double down” on lower income tax settings to help with the cost of living.

“Right now our income tax cuts are providing around $1.5 billion a month extra into the pockets of hard-working Australian households and it’s that type of disposable income that is necessary and helpful to deal with these sorts of pressures,” he said.

The budget papers will show a bringing forward of child care subsidy changes from July 1 to March 7, to cost around $224 million in 2021/22 and $670 million a year ongoing.

And there will be record spending on health and infrastructure.

“Our government is getting the job done by delivering the infrastructure needed to improve regional roads that were neglected and l