The federal Treasurer, Peter Costello, has announced a budget that includes cuts in personal income tax, and what he calls the most significant changes in superannuation in more than 20 years.
Mr Costello says marginal tax rates are being cut from 47 cents and 42 cents in the dollar, to 45 cents and 40 cents.
He says tax thresholds are also being raised, and new tax measures introduced to help low-income and older people.
"Our tax system exists to fund the decent services in health and aged care and other services that Australians legitimately expect and are entitled to receive.
"If we can fund these services, balance our Budget, defend and secure the country, and reduce the tax burden we should aim to do so.
"This year we will do so."
Mr Costello says changes to the family tax benefit system will benefit almost half-a-million families.