What you can expect when the Federal Budget is unveiled tonight

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This year's Federal Budget, dubbed by Treasurer Josh Frydenberg as a "jobs budget", will be squarely focused on repairing the economy and boosting the employment rate and hours worked.

"We won't be undertaking any sharp pivots towards austerity," says Frydenberg.

"We want more people in jobs and in better-paying jobs."

tax hike josh frydenberg

The budget, to be unveiled tonight, is set to focus on tax, child care, housing and aged care. Here's what we know so far.

Tax

Expect the one-off low and middle income tax offset (LMITO) to be extended for another year, meaning a tax cut of up to $255 for workers earning less than $37,000, while those earning between $48,000 and $90,000 will receive $1080.

As it's a tax offset, the money will be returned when you lodge your tax return from July 1. The LMITO ending has been framed as a tax hike in some corners, given that Aussies will be worse off by the above amounts once it's eventually removed.

Moreover, it's not expected that phase three tax cuts, currently scheduled for July 1, 2024, will be brought forward.

"I don't see any great need to bring forward the stage three cuts, scheduled to start on July 1, 2024," says Adrian Raftery, from the accounting and tax service Mr Taxman.

"The COVID-19 pandemic had the most dramatic impacts on those with lower incomes, who won't really benefit from these tax cuts. If the government really wants to boost the economy it could do so by a combination of targeted tax cuts for those earning less than $90,000 and an increase in the JobSeeker payment, both of which would be spent rather than saved."

Childcare

$1.7 billion will be allotted to boosting childcare subsidies.

Currently, the maximum childcare subsidy payable is 85% of childcare fees, regardless of how many children a family has in care.

Under the changes, the subsidy received will increase 30% to a maximum subsidy of 95% of fees paid for second and subsequent children.

The changes aim to incentivize parents to return to work rather than stay home looking after a child.

"This is a targeted and proportionate investment that simultaneously makes childcare more affordable, increases workforce participation and boosts the Australian economy by up to $1.5 billion per year," says Frydenberg.

"For women, in particular, it opens the door for those choosing to work or to work more, which is critical to their own economic security and a prosperous Australian economy," says Minister for Women Marisse Payne.

Housing

An additional 10,000 places will be opened for the home loan guarantee scheme, allowing first home buyers to put down a deposit with a deposit of 5%.

Another 10,000 places will be allotted to single-parent families, allowing them to put down a deposit of 2%.

Aged care

Aged care is set to get a $10 billion boost, in the wake of the aged care royal commission. While specific details haven't been released, Health Minister Greg Hunt has coined it as the "largest package in Australia's history".

Stay tuned

Budget watchers will also be looking for any indication as to when international borders will open, however, you can back it in that this will happen once the government gets the green light from its health advisers.

"The borders will reopen when it's safe to do so, and when they do, net overseas migration will increase, including skilled workers," Mr Frydenberg told The Sydney Morning Herald and The Age.

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David Thornton is a journalist at Money magazine and is one of the hosts of the Friends With Money podcast. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.