Low and middle income earners will be prioritised for tax cuts in the federal budget, but high income earners won't miss out.
Australians in the lower tax brackets will be the first to benefit from income tax changes anticipated in Tuesday's budget, Finance Minister Mathias Cormann confirmed on Saturday.
He says while job creation has benefited the economy, lower income workers haven't seen the dividends they want to yet.
"And so clearly, a personal income tax cut that prioritises low and middle income earners in the first instance, of course that is good for them and good for the economy," he said.
It's anticipated tax cuts will first apply to those in the bottom two tax brackets, earning up to $87,000 a year, and that tax bracket changes for those earning above $180,000 will apply from 2024.
Senator Cormann said data released on Saturday showed higher income earners carried the heaviest tax burden.
"If we want to ensure that Australians are incentivised and encouraged to work hard, to stretch themselves, to be the best they can be, obviously there has to be a reward for effort as well," Senator Cormann said.
Treasurer Scott Morrison expects the cuts to create a lift in spending.
"Tax relief of middle to low-income earners underpins the economic policies that support stronger consumption from an economic view and from an empathy point of view," he told News Corp.
Opposition finance spokesman Jim Chalmers said Labor had long called for tax relief for working people, and appeared cautiously optimistic about the proposal on Saturday morning.
"We'll see what the budget says in black and white on Tuesday night but we have always said that we would prefer to see any tax relief go to those who need it most - the people of middle Australia," he said in Brisbane.
But he said even if there are tax cuts for workers, the biggest concessions would still go to those who need them least.
The defining feature of the budget would be an $80 billion "handout to big business", he said.
Income tax changes would come on top of cuts for businesses aimed at creating more jobs.
Mr Morrison won't say if the budget will be back in surplus faster.
Last year he predicted the budget would be back in surplus in 2021, after a deficit of just $2.5 billion in 2020.
