Election looms over Australia's budget

Australian Treasurer Scott Morrison's budget on Tuesday will double as an unofficial election campaign launch. Small tax cuts and spending on health, infrastructure and education have already been foreshadowed or announced. The cost of these will likely be offset by closing tax loopholes for multinational companies, ending some pension concessions for the wealthy and hiking tobacco taxes. The opposition says the reforms are too modest and favour the wealthy. Prime Minister Malcolm Turnbull will dissolve parliament and call an early election on or before 11 May. Australia will almost certainly go to the polls on 2 July. Tuesday's budget will form the backbone of the Liberal-led coalition government's pitch to voters for re-election. Mr Morrison might well be wishing he had 24 hours up his sleeve. A lot is riding on his economic plan, which doubles as the government's pitch to voters. As the official announcement of an early election draws near, the resurgent opposition Labor Party has been piling on pressure with its populist policies. It appears this year's budget is about two things: neutralising Labor's lines of attack for the election, while emphasising a few key differences that play up the government's economic management credentials. Of course, there are also the minor issues of setting up Australia's economy for future prosperity and reducing a ballooning deficit. The treasurer and the prime minister say their budget will create additional jobs and grow the economy. The government will create a A$5bn (US$3.8bn; £2.6bn) fund for critical infrastructure in cities, Mr Morrison announced on Monday. There will almost certainly be small cuts in the company tax rate and those earning more than A$80,000 will also benefit as the earning threshold for the second-highest tax bracket is pushed higher. Additional spending on health and education is also being promised, but at more modest levels than in the opposition Labor party's proposals. Labor has already announced a number of policies, including a plan to end "negative gearing" tax concessions for property investors buying existing homes that would raise money to pay for its spending. The government opposes Labor's policy to end negative gearing and says it will cause house prices to crash. Mr Morrison's budget announcement will begin at 19:30 AEST (10:30 GMT) on Tuesday.