Finance Minister Simon Birmingham says the federal budget will tread a careful line between supporting households with the rising cost of living, while not inflaming inflation and interest rate pressures.
The unemployment rate fell to four per cent in February, according to the jobs figures released on Thursday, fuelling economists' expectations the Reserve Bank of Australia may raise the cash rate sooner rather than later.
It comes at a time when inflation was running at a brisk 3.5 per cent even before petrol prices spiked above $2 per litre due to the war in Ukraine.
Asked how the government can support households while not adding to inflation pressures, Senator Birmingham said: "Very carefully."
"We have to make sure each step we take are carefully structured and targeted," he told Sky News.
Deputy Prime Minister Barnaby Joyce isn't keen to cut the 44-cents a litre fuel excise, saying it wouldn't do anything to help ease the increasing cost of living.
"But what it will do is take away money we spend on roads - we still need to keep our roads moving, we still need to keep our trucks moving," Mr Joyce said.
He said Australia needed to become more economically resilient in the face of global uncertainty as the conflict in Ukraine pushes up global petrol prices and the cost of everyday items in Australia.
"When (Vladimir) Putin goes into Ukraine, the problems go all the way back to your supermarket, all the way back to your price of timber, they go all the way back to the fuel bowser," he said.
He also wants to get the budget back on a trajectory towards balance, as it was before COVID-19 emerged.
"To do that you have to make the economy bigger," he said.
Large infrastructure spending, like the new $483 million commitment for the 970 gigalitre Urannah Dam project in Queensland, will assist that cause.
It's estimated the dam will unlock 103 gigalitres of water and help nearby producers develop 20,000 hectares of irrigated land.
Mr Joyce said the project would help deliver more infrastructure to regional centres such as Mackay and Gladstone.
Less than a fortnight out from the March 29 budget, a new survey from Anglicare Australia shows most people want government action on disaster and pandemic recovery, and don't see tax cuts as a priority.
Anglicare's executive director Kasy Chambers said proposed tax cuts would make inequality worse.
"Living costs are spiralling, people are still recovering from the pandemic, and many communities are reeling after floods and storms," she said.
"Tax cuts are not the answer to these problems, and Australians know it."
Meanwhile, a government grant of $61.2 million will go towards an Australian Genomic Cancer Medical Centre project to help with research and the development of drugs for people with advanced cancers.
Health Minister Greg Hunt said the grant would help the project carry out clinical trials for customised cancer treatments and precision medicine.
It's hoped the multimillion-dollar project will help make Australia a future hub for the development of cancer drugs.
The government also announced on Thursday the budget would include an extra $74 million for the existing Perth city deal, including upgrades to Edith Cowan University and work on the new Swan River Bridge.
