Inflation and slowing growth pose budget balancing act

WHAT IS KNOWN ABOUT THE FEDERAL BUDGET

The third federal budget under the Albanese government will be handed down on May 14 and several spending and policy announcements have already been made.

THE BIG PICTURE

*A second surplus is still the goal in 2023/24

*The mid-year budget review had forecast a deficit of $1.1 billion for the 2023/24 fiscal year, narrowing from the $13.9 billion forecast in last year's budget

*Revenue upgrades of about $25 billion are expected by Treasury over the five year forecasting period. This is a small windfall than in the past two budgets but around 95 per cent of these tax upgrades will be banked

*About $1 billion in savings on consultants and contractors has been found

*The reworked stage three reform package will be the main source of cost of living relief but other targeted measures are expected

*Above target though moderating inflation remains the primary economic challenge for the budget, but the slowing domestic economy is also a priority

*Latest economic data points to ongoing tightness in the labour market and persistent price pressures

*A troubled Chinese property sector and geopolitical tensions in the Middle East and Europe are among the global challenges weighing on the budget

*Treasury has downgraded its forecasts for key economies, including China, Japan and the United Kingdom

*The government has again been under pressure to lift income support payments

MEASURES

*Student teachers, nurses and social workers will be paid during their compulsory work placements

*The HELP-HECS indexation rate has been capped to ensure indexation matches either the consumer price index or the wage price index

*Australian carers who receive government support payments will be provided better work flexibility

*A national firearms register will be set up

*Super is to be paid on government-funded paid parental leave

*Almost 500 "nuisance" tariffs are set to be scrapped

FUTURE MADE IN AUSTRALIA ACT

The Future Made in Australia Act involves deploying public funds to give viable zero carbon industries and businesses serving the national interest a leg up so they can attract more private investment. More details are expected to be revealed in the budget but it encompasses a number of initiatives already, including:

* The federal and Queensland governments have set aside nearly $1 billion for tech company PsiQuantum to help it build the world's first fault-tolerant quantum computer in Brisbane

*The $1 billion Solar SunShot program aims to bolster the nation's solar panel manufacturing capabilities

*The $2 billion Hydrogen Headstart program is intended to fund large-scale hydrogen production projects

*The $4 billion total available under the Critical Minerals Facility is designed to help complement commercial financing and help get critical mineral projects off the ground

*$400 million in loans has been announced for Australian company Alpha HPA to develop a high purity alumina facility in Gladstone, Queensland. Financing will in part come from the Critical Minerals Facility

*$185 million in loans have been conditionally approved for Renascor Resources to fast track the first stage of a purified graphite project in South Australia

*$330 million towards nine clean energy and emissions reduction projects has been allocated at heavy industrial sites nationwide via the $1.9 billion Powering the Regions Fund.

*The government says its net zero industrial policy agenda has been underpinned by the National Skills agreement, the National Reconstruction Fund, the establishment of the Net Zero Economy Authority, and its push to rollout renewables and spur innovation