What might be in the federal budget

THE MAY 3 FEDERAL BUDGET:

WHAT WE KNOW

* There won't be a fistful of dollars as the government lives up to its promise of living within its means.

* Prudence, fairness and responsibility will be the catchwords.

* Measures will be included to boost jobs and growth as the economy transitions from the mining investment boom.

* The much-touted tax reform package will be included.

WHAT WON'T BE THERE

* Changes to tax breaks for property investors, aka negative gearing.

* A rise in the rate of GST, or broadening its base.

WHAT WILL BE THERE

* A reduction in the overall tax burden.

* Signs of modest improvement in the budget bottom line.

* Confirmation the budget repair levy on high-income earners will end on July 1, 2017.

* $5 billion over four years on a subsidised public dental scheme.

HINTED AT

* Modest personal income tax cuts to conquer wage inflation pushing middle-income earners into the second-highest tax bracket.

* Timetable for phased-in cut to the company tax rate of 30 per cent.

* Paring back superannuation tax concessions for high-income earners by lowering the 30 per cent tax on concessional contributions to $180,000 from $300,000, while helping those on low incomes.

WHAT THE ECONOMY IS DOING

* Growing at its fastest pace in two years.

* Benign inflation outlook; unemployment rate remaining close to six per cent; wages growth at its slowest in almost two decades.

* Iron ore prices have soared to $US70 ($A90) per tonne compared to $US39 assumed in the mid-year budget review, a positive for national income.