One-off $250 payment expected in Budget for low-to-middle income earners

Treasurer Josh Frydenberg is expected to announce a one-off $250 payment for low-to-middle income earners in tonight's Federal Budget to help deal with the cost of living.

While the exact details of the payment are to be confirmed tonight, the Sydney Morning Herald reports that it is suspected to made in lieu of an extension to the $1080 tax offset, reports

Both the Treasurer and the Prime Minister Scott Morrison have repeatedly said tonight's Budget will address the spiralling cost of living for ordinary Australians, including measures to reduce the cost of petrol.

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It is widely suspected the government will temporarily cut the fuel excise – a government tax that contributes to the price of each litre of fuel – by between 10 and 20 cents for a period of six months.

Currently the fuel excise is paid at 44.2 cents per litre of fuel – or around 20 per cent of each litre of unleaded fuel retailing for $2 a litre.

"There are real pressures right now on Australians. It's the number one topic around the kitchen tables," Mr Frydenberg said this morning.

First home buyers are also set to reap the benefits of several Budget sweeteners, including an expansion of the government's deposit and super saver schemes.

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In pre-budget briefings the Morrison Government has outlined it will drastically expand its Home Guarantee Scheme to 50,000 places.

Under the scheme, eligible first home buyers only have to stump up 5 per cent of a deposit for a property valued under a certain threshold, with the government acting as guarantor for the remaining 15 per cent.

The scheme is designed to overcome the biggest hurdle in property purchasing – that is saving for a deposit – while helping first home buyers to avoid Lenders Mortgage Insurance (LMI) for having a deposit under 20 per cent.

While many Australians will be watching to see what the Budget contains for them, others will be bracing for the headline numbers of Australia's national accounts.

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Australia's gross debt is expected to blow out to $852 million, while the Budget deficit is expected to be a better-than-expected loss of around $70 billion.

Deloitte Access Economics partner Chris Richardson has said soaring commodity prices and company tax has provided a handy windfall for the government just prior to the Budget being handed down.

"Economic recovery continues to repair the budget," Mr Richardson said.

"COVID costs are mostly over, job gains are huge, and key commodity prices (including iron ore, coal and gas) are stratospheric."