Cost of living, health and economic resilience in the face of US tariffs will be front-and-centre in a crucial pre-election budget.

With just weeks until Australians head to the ballot box, the budget, to be handed down on Tuesday, will be one of the federal government’s last tests during this term.

Labor is leaning into its core strengths by committing billions to Medicare, while addressing cost-of-living pressures — which will be a top election priority — all without fuelling inflation.

“It’s been a great task trying to land a 747 on a helicopter pad,” Prime Minister Anthony Albanese told reporters in Canberra.

The budget will also shore up Australia’s economic defences against Donald Trump just days before the US president’s reciprocal tariffs take effect.

While Australia will not be directly impacted by the trade measures, escalating tensions are a concern and Treasurer Jim Chalmers said he had dedicated part of the budget to ensuring the nation was more resilient to “external shocks”.

“We’re a very trade-exposed country — we’re not uniquely impacted by these tariffs out of Washington DC, but we’ve got a lot of skin in the game,” he told reporters.

“Our budget tonight will be a platform for prosperity in a new world of uncertainty.

“It will recognise that people need and deserve a bit more extra help when it comes to the cost of living”.

While the Coalition wants a restoration of Australian prosperity, shadow treasurer Angus Taylor said the government had thrown out fiscal guardrails.

“We need to see a budget where the economy grows faster than spending — it’s simple,” he told reporters.

“When you do that, then you can bring down deficits, you can bring down debt, and you can get into the black.”

Australia is expected to hit a record level of debt in the economic papers but Chalmers has spruiked the government’s “responsible economic management” for limiting gross debt to $940 billion in 2024/25.

While that’s a record for the Commonwealth and up from the $906.9 billion figure in 2023/24, it’s $177 billion lower than it was projected to be in a fiscal update before the last election in 2022.

That means taxpayers will avoid having to fork out $60 billion in interest costs over the 11 years to 2032/33, despite borrowing costs rising since the last election.

The government points to $95 billion in savings across its four budgets as proof it is responsible for the turnaround in the bottom line.

But the budget “table of truth”, as dubbed by economist Chris Richardson, tells a different story.

This reconciliation table shows “parameter variations” — including factors outside the government’s control, such as commodity prices — have contributed to more than 100 per cent of budget upgrades.

In other words, the government’s decisions have stood in the way of an even bigger improvement in the budget bottom line.

Australia’s federal debt is still fairly low compared to the rest of the world, at just over a third the size of the economy.

But Australia’s debt is expected to grow as public spending increases and a temporary boost to revenue fades, peaking at 37 per cent of GDP.

Increasing pressures on the budget, like defence, health, aged care, the NDIS and interest payments are leading to a widening structural deficit, Deloitte Access Economics partner Stephen Smith said.

He expects this year’s underlying deficit to be slightly better than predicted in the December update at $26.9 billion.

But Richardson said the underlying deficit was becoming increasingly irrelevant because the government used an accounting sleight of hand to shovel more spending “off-budget”.

These measures are classed as investments which will supposedly make a return for the government, although in recent years have more often made a loss.

-AAP