Ahead of Jim Chalmers delivering his fifth budget on Tuesday, the treasurer, Prime Minister Anthony Albanese and Finance Minister Katy Gallagher have released a video online to confirm tax changes for property owners.
"Right now, too many young people feel locked out of the housing market," they said.
"Tonight we're changing Australia's tax system to level the playing field for them.
"This is about doing the right thing to help more young Australians buy a home of their own."
Details of the plans were not included in the video but Labor is expected to cut the capital gains tax discount and limit negative gearing of investment properties.
The measures have been blamed for providing investors with an unfair leg-up when competing with would-be owner-occupiers for properties.
The changes would likely help 75,000 extra people buy their first homes over the coming decade, the government said.
The budget, to be released in the evening, will not show a return to surplus in any year of the four-year outlook, but the forecast deficit will narrow in every year compared to last December's mid-year update.
The mid-year economic and fiscal outlook projected a cumulative deficit of about $143 billion from 2025/26 to 2028/29.
Dr Chalmers said there will be an emphasis on cost of living pressures, housing and rising inflation spurred by the conflict in the Middle East.
"We choose the hard road of reform, not the path of least resistance, a responsible budget, a reform budget," he told reporters in Canberra.
"The status quo in the housing market and in the tax system is not working for too many Australians."
Dr Chalmers said the budget wasn't a "political strategy", but it would respond to the concerns for voters struggling to get a foot-hold on the housing ladder as support bleeds away from the major parties towards One Nation.
Labor has been keen to portray this budget as one of spending restraint, after warnings by economists and Reserve Bank governor Michele Bullock that splashing out would only fuel inflation and risk further rate hikes.
Some big-ticket spending measures have been announced, including on defence, while hospitals will receive an additional $25 billion in funding.
These will also be partly offset by tax increases on property investors and people with trusts.
Nationals leader Matt Canavan said the prime minister should take his plans to an election if he had changed his mind on negative gearing and capital gains tax.
"Clearly, this prime minister does not have the ticker nor the integrity to ... face the Australian people when he changes his promise," he said.
A one-off tax handout of $200 to $300 on earned income will only kick in from 2027 to avoid stoking inflation in the near-term, according to reports.
Senator Gallagher has found $63.8 billion in gross savings in the budget, but it was unclear how much would be banked to narrow the deficit and how much would be shifted to other spending areas.
The centrepiece of the savings package will be a forecast $35 billion reduction in the cost of the runaway National Disability Insurance Scheme.
The budget will show the sum of policy decisions taken by the government improved the budget for the second time since Labor took power in 2022, after a $2.2 billion improvement in December.
However, that was only due to some creative accounting around the government's home battery scheme.
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