A pledge to deliver Australia's first surplus in 12 years, reduce Commonwealth debt, and cut tax for low and middle-income earners were the headline items in Treasurer Josh Frydenberg's first budget.

Canberra won infrastructure spending as the Coalition opened government purses in its election pitch, but missed out on planned upgrades to Australia's rail infrastructure.

The surge in government spending proposed in the budget was coupled with the prospect of a forecast surplus of $7.1 billion next year, and a promise to eliminate Commonwealth net debt by 2030 or sooner.

Budget papers forecast economic growth of 2.75 per cent and said the unemployment rate would remain steady at 5 per cent, but warned trade tensions, Australia's deteriorating housing market and a slow-down in China's economy posed headwinds.

"The budget is back in the black and Australia is back on track," Mr Frydenberg told Parliament on Tuesday.

The improvement comes as the government is expecting to earn $1.2 billion more in tax revenue than it had forecast in 2018-19, with strong commodity prices helping it to rake in more of company earnings.

Tax revenue is expected to continue growing by 4.2 per cent on average over the four years to 2022-23.

But the government will actually gather $18.2 billion less in tax than it had expected in the period, because of changes to its forecasts for household consumption, housing investment and wages.

The Coalition is pinning a reversal in its political fortunes partly on a promise of $158 billion in extra tax relief for people earning up to $126,000, a measure that would give up to $1080 in savings to single income families and up to $2160 for dual-income families.

Among the big-ticket budget sweeteners was a plan to lower the 32.5 per cent tax rate to 30 per cent beginning in July 2024 for all taxpayers earning between $45,000 and $200,000.

Federal public service jobs are set to rise over the coming year, as the government reveals plans to bolster the number of foreign affairs and national security officials.

Major jobs losers include the Agriculture Department, while the Human Services Department overseeing Australia's welfare program will continue to shrink.

Growth in federal bureaucracy staffing could lift Canberra's job market but the Coalition has drawn on the city's public service workforce in an appeal for regional votes promising more decentralisation.

Canberra emerged as the main source of government jobs marked for relocation to the bush as the Coalition proposed another 190 to head bush.

Despite the election-fuelled spending, the size of the government, relative to the population, is expected to shrink marginally over the coming year.

The federal government's running costs – what it spends on staff, consultants, operations and so on – per Australian is project to drop by 2.3 per cent in real terms.

The government's civilian workforce will fall to 645 staff per 100,0000 population, down from 650 this year.

The Coalition is promising $50 million in new infrastructure projects for the ACT from a massive pool of spending aimed at decongesting cities and improving road safety.

In a budget full of sweeteners and spending measures targeted at convincing voters to return the government, the ACT's safe electoral margins have meant its investment is mainly an afterthought.

Upgrades to William Slim Drive and the Kings Highway will be appreciated by Canberra's voters, but the capital has been left out of fast rail and other strategic transport investments.

While the $68 million in already-announced health measures includes needed facilities in a residential eating disorder clinic, mental health and addiction services, and an expanded intensive care unit, they don't represent significant strategic investment.

with AAP