Joe Hockey has thrown $5 billion of tax relief at small business and farmers and given $4.4 billion in support for families to stimulate the economy and kickstart the coalition's electoral hopes.
"This is a budget that unleashes our nation's potential," the Treasurer declared as he delivered his second budget on Tuesday.
A deficit of $35.1 billion for 2015/16 defied economists' expectations, and the government still expects to return to surplus in 2019/20.
But the budget papers still forecast a jobless rate of six per cent or over until 2018/19, despite a 0.5 per cent lift in economic growth.
Sensible savings, prudent spending and redirected funding to small business, child care, infrastructure would boost growth and jobs, Mr Hockey said.
Small business will get a corporate tax rate cut of 1.5 per cent, an annual five per cent tax discount of up to $1000 a year for unincorporated businesses and, from budget night, an immediate tax deduction for all items purchased by a small business up to $20,000.
However, shadow treasurer Chris Bowen said Mr Hockey had managed to double the deficit in one year and the second coalition budget retained the worst aspects of the first.
"The fundamental unfairness of last year's budget disaster remain ... the $80 billion cut from hospitals and schools, $100,000 university degrees and cuts to family payments," Mr Bowen said.
In a major new initiative WA, Queensland and the NT will share in a new $5 billion northern Australia infrastructure facility providing cheap loans for new ports, pipelines and other infrastructure.
A $4.4 billion families package includes a simplified child care subsidy to start from July 1, 2017, with a top-up fee for disadvantaged children.
Paid parental leave "double dipping" - accessing both employer and government schemes - will stop from July 1, 2016, but the measure is expected to be blocked in the Senate as it is linked to family tax benefit cuts.
Suspending the dole for under-30s for six months has been dumped and replaced with a four-week waiting period for under-25s.
Changes to the age pension assets test will start from January 1, 2017 - easing pressure on the $44 billion annual spending on pensions.
Farmers will get an immediate tax deduction for new investment in water facilities and new tax breaks for fodder storage and fencing.
Tax receipts have been downgraded by $52 billion since the 2014 budget, $20 billion due to falling iron ore prices.
In a bid to recoup some of this, tax-avoiding multinationals will be chased down, fringe benefits on meals and entertainment will be capped, foreign investors will pay fees and working holiday visa holders will pay more tax.
Independent senator Nick Xenophon said the budget's revenue assumptions were "very courageous" and he will seek Senate support on Thursday for an inquiry into iron ore prices.
The national security budget will be boosted by $1.2 billion including new computers and an online campaign against extremists.
Fifty-five road projects will start construction in 2015, but Victoria's East West Link remains on the table despite the Andrews' government's opposition to the road project.
Mr Hockey said a review of Medicare, following the debacle of last year's co-payment plan, could still deliver savings in health.
ACTU president Ged Kearney said a $5 billion company tax cut fell was not a plan to create jobs.
"The government is selling this as a budget for jobs but has forecast unemployment to stay above six per cent for the next three years," she said.
Business Council chief Jennifer Westacott said the budget deserved to be passed by the Senate.
"The budget is without doubt a shot in the arm to small business, and creates a better environment for business confidence that will drive investment, job creation and economic growth."
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