But a surge in cost of living pressures amid devastating floods and a European conflict jacking up commodity prices could see a fiscal pivot ahead of the upcoming election.

The federal budget next Tuesday is set to be an inflection point where large scale spending during the pandemic is set to be wound back, with a number of economists expecting a deficit improvement of up to $20 billion since the last mid-year outlook.

Despite a likely cliché Coalition speech touching on its "strong economic management" over the last two years which has seen the Australian economy bounce back stronger than most other major economies, Treasurer Josh Frydenberg will need to address the elephant in the room.

And that is the rising cost of living.

Discretionary items, house values and necessities such as fuel have seen prices blow out over March quarter, and some analysts believe it will push inflation beyond 5 per cent.

A lack of material, supply shortages and jittery commodity markets as a result of Russian sanctions has elevated prices in an economy that already was experiencing upward inflationary pressures.

According to the Australian Bureau of Statistics, the annual consumer price index to the December quarter rose 3.5 per cent.

Those rises have already seen petrol at the bowser jump higher than $2 a litre and pushed calls for excise tax relief by a number of politicians.

Westpac chief economist Bill Evans expects the short-term strategy of the budget will be to address these cost of living pressure and believes the commonwealth could see a temporary cut of petrol excise tax.

The major bank expects the eye-watering budget deficit sparked by the pandemic, will see a $21.5 billion improvement to $77.7 billion since MYEFO and around $78 billion in windfall gains over the next four years.

Mr Evans said the $78 billion improvement will probably see 25 per cent of the savings put towards targeted spending packages to address the supply constraints and cost pressure within the economy.

"Clearly there will be a cost of living package, we're penciling in $4 billion for that," he said. "I think most of it will go around the themes of boosting supply in the economy. So things like training and infrastructure."

Long term, Mr Evans believes the budget strategy will be geared to fiscal repair, with Treasury expectations likely to show a future unemployment rate within the 3 per cent range.

However, spending injection pumping more stimulus into the economy may not bode well for the Reserve Bank's timeline to lift the cash rate which is already flagged to face added pressure in the first half of the year.

ANZ has indicated it believes core inflation could rise in the first two quarter by 5 per cent due to the oil price surges caused by the Ukraine conflict and east coast floods likely to put additional pressure on supply shortages in the economy.

Food prices are also likely to be impacted from floods impacting agricultural supplies.

In his rebuttal, Labor treasury spokesman Jim Chalmers is tipped to blast the coalition on not combatting the increasing cost of living, with Labor alleging real wage growth in Australia is going backwards.

According to RBA figures, real wage growth in this current financial year is forecast to slide 1.25 per cent.

"Cost of living pressures on Australian working families didn't begin when Russia attacked Ukraine, they began when the Government started attacking wages and job security," Dr Chalmers said.

Treasury will not want to produce a document showing stagnating wages, however Mr Evans said factoring in short term inflation shocks, wages in real terms are expected to grow in 2023.

Tax cuts will also form part of the budget arsenal. A move which the Australian Council of Social Services says is eroding public expenditure to assist people out of poverty and weaken the budget $30 billion a year.

ACOSS chief executive Cassandra Goldie flagged housing is the biggest concern with respects to cost of living, claiming a near doubling in the amount of rent assistance and JobSeeker payments is needed to keep up with price surges in the private rental market.

"We know in regional Australia rents have gone up by 18 per cent since the pandemic," Ms Goldie said, who was quoting from a recent ACOSS report conducted in conjunction with the University of New South Wales.

"We're very worried the government seems to be obsessed with this idea that government is there to get out of the way and to deliver more tax cuts in an environment where our public expenditures are far too low for what the country needs."

Ms Goldie said additional financial support implemented during the height of the pandemic was welcomed and a number of those measures should be permanently planted into public spending.

She noted increased JobSeeker and support payments over the last two years had helped halve the nation's poverty rate.

ACOSS believes land and superannuation tax reform should be put on the agenda to look at other revenue streams to fix the gap in funding.

Geoff Warren, an associate professor at the Australian National University also agreed reform is needed within the nation's wealth system, saying its benefits skew to higher income earners.

He said changes to the superannuation taxation will not be an issue addressed at the upcoming budget.

"The tax concessions don't go to the right people," he said. "It would be good to see the government address that but it is not going to happen in this budget. It's too dangerous. Its politically fraught to touch anything in this area."

There is also speculation as to whether an extension of the low-to-middle income tax offset will also appear. A package Mr Evans believes is not be needed but would not be surprised if it sticks around to appease voters ahead of the election.

But the fate of Mr Frydenberg's budget ultimately hinges on the outcome of the May election.

If the Coalition is dumped from office the package of sweeteners to ease cost pressures may never see the light of day.

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