Just weeks ahead of an election and days before the US president's reciprocal tariffs take effect, Treasurer Jim Chalmers will deliver his government's budget on Tuesday.
While Australia will not be directly impacted by the trade measures, escalating tensions are a concern and Dr Chalmers said he had dedicated part of the budget to ensuring the nation was more resilient to "external shocks".
"We're a very trade-exposed country - we're not uniquely impacted by these tariffs out of Washington DC, but we've got a lot of skin in the game," he told reporters in Canberra on Tuesday.
"The budget will be a platform for prosperity.
"Our best defence against this global economic uncertainty is a more resilient, more competitive, more productive economy, and you'll see that that is a major feature of tonight's budget."
The budget will include money for a "buy Australian" campaign, green metals, domestic manufacturing and cost-of-living measures.Â
"We know that the cost of living is front-of-mind for most Australians, and it will absolutely be front and centre tonight," Dr Chalmers said.
While the coalition wants a restoration of Australian prosperity, opposition finance spokeswoman Jane Hume said fiscal guardrails had disappeared.
"We want to see ... guardrails put back into our system so that we can guarantee that in the future, budgets won't run out of control, spending won't run out of control, debt won't run out of control," she told Sky News.
Australia is expected to hit a record level of debt in the economic papers but Dr Chalmers has spruiked the government's "responsible economic management" for limiting gross debt to $940 billion in 2024/25.
While that's a record for the Commonwealth and up from the $906.9 billion figure in 2023/24, it's $177 billion lower than it was projected to be in a fiscal update before the last election in 2022.
That means taxpayers will avoid having to fork out $60 billion in interest costs over the 11 years to 2032/33, despite borrowing costs rising since the last election.
The government points to $95 billion in savings across its four budgets as proof it is responsible for the turnaround in the bottom line.
But the budget "table of truth", as dubbed by economist Chris Richardson, tells a different story.
This reconciliation table shows "parameter variations" - including factors outside the government's control, such as commodity prices - have contributed to more than 100 per cent of budget upgrades.
In other words, the government's decisions have stood in the way of an even bigger improvement in the budget bottom line.
Australia's federal debt is still fairly low compared to the rest of the world, at just over a third the size of the economy.
In the UK, government debt is almost as large as GDP while the US has eclipsed 120 per cent.
But Australia's debt is expected to grow as public spending increases and a temporary boost to revenue fades, peaking at 37 per cent of GDP.
Increasing pressures on the budget, like defence, health, aged care, the NDIS and interest payments are leading to a widening structural deficit position, Deloitte Access Economics partner Stephen Smith said.
He expects this year's underlying deficit to be slightly better than predicted in the December update at $26.9 billion.
But Mr Richardson and other economists have said the underlying deficit was becoming increasingly irrelevant because the government used an accounting sleight of hand to shovel more spending "off-budget".
These measures are classed as investments which will supposedly make a return for the government, although in recent years have more often made a loss.
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