CANBERRA, May 7 (Xinhua) -- Personal income tax cuts, a crackdown on illicit tobacco, space-exploration funding and a heavy investment in infrastructure will form the core of the Australian government's federal Budget on Tuesday.
The upcoming budget is expected to be the last one before Australians head to the polls at the next federal election, and experts have predicted the government will attempt to entice voters on Tuesday with a series of financial measures.
These will include personal income tax cuts which are expected to form the centrepiece of the budget.
The Treasurer, Scott Morrison, has promised that revenue as a proportion of the economy will never rise above 23.9 percent of Gross Domestic Product (GDP) and in order to facilitate this, the government must lower the current tax levels. However, Morrison said these cuts will not be "mammoth."
They are able to be implemented as a result of a forecast surplus over the next two years.
Mathias Cormann, Australia's Finance Minister, announced at the weekend that tax cuts will be aimed at people in the lower tax brackets.
"What I can say to you is that we will be prioritising low and middle-income earners in the first instance, but there will be a phased approach moving forward," Cormann said on Sunday.
The federal budget, which will be announced by Morrison on Tuesday, is an annual document which outlines the government's proposed expenditures and savings over the next four years.
It is expected to include heavy investment in infrastructure, mainly transport and roads as the government looks to reduce congestion and boost the economy.
The government has set aside more than 18 billion U.S. dollars to fund projects in Australian states such as Victoria, New South Wales, South Australia and Western Australia.
These projects include a 3.7 billion U.S.-dollar Airport Rail Link in Melbourne, Australia's second largest city, and more than 1 billion U.S. dollars allocated to roads and transport in South Australia.
"The investment in road, rail and public transport projects will reduce congestion, keep our roads safe, connect people to jobs and get our produce to market," Morrison told reporters on Sunday.
"When you're dealing with some of these big projects, we are all in. We are there making sure projects are viable, functional and they pay for themselves."
He has also announced plans to crack down on the illicit tobacco industry which is expected to raise almost 3 billion U.S. dollars over four years, by preventing the sale of 864 tonnes of illegal tobacco.
Under the new policy, the Australian Taxation Office (ATO) will be given expanded powers to apply taxes when tobacco enters Australia rather than when products such as cigarettes leave a licensed warehouse.
The government has also confirmed federal funding will also be made available for the establishment of Australia's first space agency. The agency will be responsible for coordinating the country's aeronautical projects.
Matthew Colless, a professor in the Australia National University's (ANU) School of Astronomy, said the agency will allow Australia to capitalise on a 316 billion U.S.-dollar worldwide industry.
"Government funding for an Australian space agency is good news for the country and for the national space industry. It is a positive first step towards developing a capacity that Australia will certainly need in the 21st century," Colless said.
Professor Warwick McKibbin, a member of ANU's Centre for Applied Macroeconomics Analysis, said Morrison's budget should serve Australia's long-term interests.
"It is important that the 2018/2019 budget does not repeat the errors that governments have made over the past 15 years of making permanent spending and tax commitments based on temporary increases in revenue," McKibbin said in a statement.
"The budget should not be about short-term politics. It should outline a clear vision of the long-term direction for the Australian economy, acknowledge the many serious risks in the global and domestic economies and put in place the policies that will raise the living standards of all Australians over time."
