TREASURER Joe Hockey has asked all taxpayers to "pay it forward" in an effort to return the Federal Government's coffers to a surplus in a decade.
In handing down his first budget on Tuesday night, Mr Hockey said that all taxpayers should be thinking of the "national interest", rather than how it would impact them personally.
But for many families, coping without key pensions and welfare payments will be difficult, with the budget aiming to close the gap on the number of families able to claim a raft of government payments, from disability support to Family tax benefits.
While families may feel the heat, Mr Hockey is likely to face a fierce backlash from the state governments', with the budget cutting or removing a raft of national deals to give the state's funding.
Key to this was the removal of more than $21 billion in Commonwealth grants to the state for schools and hospitals funding, with Mr Hockey saying the deals would be renegotiated at a later date, with new arrangements for indexing rises for funding expected.
But his comments follow Queensland Premier Campbell Newman earlier on Tuesday promising he would pull no punches in his response to the budget - particularly if it did not match his expectations on roads funding, among other issues.
Mr Hockey, without releasing details, also told reporters in Canberra he had "built-in" future income tax cuts into the 2014-15 budget, to give taxpayers further relief in the next three years.
Before Mr Hockey released the budget on Tuesday, government MPs were told on Tuesday morning they should be prepared for a backlash from voters in their electorates, and should be ready to get out and "sell" the budget measures.
Government backbench sources have previously confirmed they believed the budget would be a "tough sell", but were hopeful any political backlash would be dealt with well before the next federal election.
Families face cuts in welfare payments
About $6 billion will be taken away from families under changes to family payments over the next five years.
The biggest change will see the Family Tax Benefit Part B (FTB-B) will be cut for families when their youngest child turns six.
Currently, 60% of families with children under the age of 16 receive the payment.
The change will save the government almost $2 billion over five years.
Families will also miss out if the main income earner brings home more than $100,000, down from the current threshold of $150,000.
All family payments will be frozen and remain at current rates for two years, saving taxpayers a further $2.6 billion over four years.
There will also be cuts to the end-of-year supplements for families.
From July next year, the Large Family Supplement will only apply to families with four or more children.
But single parents receiving the full FTB-A will get an $750 for each child between six and 12 years of age.
Pensioners blast budget for hitting elderly, sick
AUSTRALIA'S pensioners have blasted Joe Hockey's first budget saying the elderly and sick will be hit hardest by his bid to tackle debt.
"The message to Australians tonight is: 'if you get sick, you'll pay. If you get old, you'll pay. If you lose your job or acquire a disability, don't expect to get support so easily" Combined Pensioners and Superannuants Association (CPSA) manager, research and advocacy, Amelia Christie said.
"Sharing the burden is heavily falling on the shoulders of those least able to afford it."
"Removing wage indexation of the pension (Age, Disability Support and Carer pensions) is going to have a devastating impact on pensioners, especially the 2 million who have no other income but the pension."
"Even the Commission of Audit didn't go so far as to recommend removing wage indexation entirely.
"CPI does not reflect the purchasing practises of a pensioner, which is why the Pensioner & Beneficiary Living Cost Index (planned to be scrapped, too) was introduced in 2009.
"In other words, pensioners will see a real reduction in their income."
"Over the past five years, if the pension was lifted in line with inflation alone and not wages, pensioners would be $32.10 per week worse off today. In other words, the historic 2009 pension increase would be all but wiped out."
"Currently, the pension is benchmarked to 27.7% of Male Total Average Weekly Earnings.
The pension is also indexed to CPI and the Pensioner Beneficiary Living Cost Index.
Whichever index results in the highest increase is the index used. Because wages grow faster than price indices, the MTAWE benchmark has lifted pensions more often (6 of the past 10 pension rises).
"Confining pension indexation to CPI will see the pension dramatically lose its value over time, just as Newstart has. It will, like Newstart, fall behind community living standards, which is what the MTAWE benchmark is designed to prevent."
Patient contributions to health care (GP Tax)
This measure removes universal healthcare and will hit pensioners hard. Pensioners tend to use GP services more often because they have a disability or age-related health issues.
"Paying $7 per visit to a GP will deter many from visiting their doctor or getting much needed pathology tests or scans."
"A 2008 study found that when the Howard Government increased the price of PBS medications for pensioners, pensioners avoided purchasing life-saving medications."
"It stands to reason that pensioners will limit their purchase of PBS medications when the co-payment jumps by 13% from January 2015 (from $6.10 to $6.90). This will be aggravated by the increase in the safety-net threshold, which will see a pensioner pay up to $427.80 per year for PBS medications."
Pension deeming rates and elgibility thresholds
"Many pensioners with money in the bank or superannuation will see their pension cut as a result of the deeming rate changes. It will also see some pensioners become ineligible for a pension."
Commonwealth Seniors Healthcare Card (CSHC)
"Cutting back the incomes of Australia's pensioners over time, while granting welfare to a greater number of seniors too wealthy to be eligible for a pension through the CSHC, is going to be a tough sell for the Abbott Government."
"CPSA does welcome clamping down on the super income loophole in the interests of fairness. CSHC holders with only super income avoid the income test for the payment because super is tax free and only taxable income applies to the CSHC income test."
"CPSA welcomes the Restart program to help mature-aged unemployed people get jobs. It is good to see that the $10,000 incentive payment for employers will be spread over two years, which will encourage employers to retain jobseekers over the long term."
"Forty-one per cent of the long-term unemployed are aged over 45. CPSA is keen to see how successful the Restart program will be in reducing mature-age long-term unemplyment, particularly in light of the pension age rising to 70."
"Lifting the pension age to 70 will hurt low-income workers and those unable to work who, unlike the well-off, do not have healthy superannuation balances to fall back on."
"The Abbott Government has made the Commission of Audit recommendation of lifting the pension age to 70 by 2053 look compassionate, by proposing it be lifted to 70 by 2035."
"CPSA welcomes free bowel screening every two years for people aged between 50 and 74, by 2020. This should see higher early-detection rates among the over 50s and hopefully lead to improved survival rates.
Joe Hockey hands down his 'slash and burn' budget
TREASURER Joe Hockey is handing down a slash and burn budget which will axe thousands of public service jobs while trying to reduce the deficit from $123 billion to $60 billion over four years.
But the Abbott government's first budget is also expected to include sweeteners, including billions of dollars for road projects and medical research.
The Coalition will announce a medical research future fund to be worth $20 billion by 2020, which will be paid for by savings in the health portfolio.
Those going to a doctor, however, are expected to pay for the privilege with speculation of $6 to $15 co-payments.
It is expected that 16,000 public servant jobs will go as part of a major shake-up of government services, including the axing of multiple government bodies.
As a sweetener to the government's plan to increase the pension age to 70, a $10,000 incentive will be offered to employers who hire those aged over 50 who have been on income support.
The Keogh family of Caloundra is hoping the federal budget delivers no major surprises, although they're aware that Australia's economic stability requires some major sacrifices.
With three children aged six and under, mother-of-three Karolyn Keogh hopes child care costs remain affordable after the details of Australia's spending plan are revealed by Mr Hockey.
Mrs Keogh is also concerned about potential increases in fuel excise, which would impact the overall cost of running the family car.
However, her overall worry is the state of the economy - she is among a significant number of locals who are bracing for uncomfortable decisions that will impact their lives negatively.
"While we'd like more money in our pocket and to pay less taxes, that's not the way the world works, it has to be paid for," she said.
Fairfax reported earlier that Tony Abbott had told his party room that the budget would include more sweeping changes than the 1996 budget.
''This is a watershed moment when a bold new government does what has to be done to set the nation on a better course.''
Earlier, Mr Abbott said his government's first budget would bring ''pain with a purpose''.
Mr Abbott confirmed for the first time that the budget would include a 'debt levy' as well as the reintroduction of indexation on fuel excise.
He also pronounced as dead the lifetime gold pass - a travel perk available to retired politicians.
But his planned debt tax - a 2 per cent levy on people earning more than $180,000 - may fail in the Senate with the Greens, Palmer United Party and thee Senator-elects vowing to block the plan.
Update your news preferences and get the latest news delivered to your inbox.