This is especially true if the rumours of significant revenue increases are well founded.

Yet this budget brings with it a different kind of pressure: it will almost certainly be the last one before the next election and so must provide a platform to support a re-election campaign.

If it proves to be the last budget before a change of government, it will also serve as a scorecard of two terms of Coalition rule.

Though some good steps have been taken in welfare and elsewhere, a failure to cement lasting reform in this budget would show little evidence the Coalition had tackled the problems of debt or deficit — or kick-started serious economic growth in its six year tenure.

In a very real sense, the fiscal legacy of the Abbott/Turnbull governments is likely to rest on the outcome of this budget.

So what should the government’s priorities be? Substantial cuts to spending are very unlikely.

While there remains much waste to be cut in government expenditure, it would be a crazy brave decision to take spending cuts into an election campaign against a Labor opposition riding high on a populist, big-spending agenda. Nor are there many votes to be gained by the Coalition attempting to outbid Labor with even more spending.

The need to both provide a platform for re-election and nail down an economic legacy, together with the supposed surge in tax receipts, suggest that the action is likely to be on the revenue side.

As Australia has needed substantive tax reform for at least a decade, this is a good outcome. Yet the government will still be somewhat limited by its commitment to return the budget to surplus in 2020/21.

While the leaked proposal to drop a planned increase in the Medicare levy is a good start, the government should focus all their remaining resources on a couple of key reforms.

First, for a very modest upfront cost the Government can forever end the cruel charade of bracket creep. This insidious automatic increase in taxes that comes via inflation is particularly harmful for low and middle income earners, where the marginal tax rates increase sharply.

While it is true that bracket creep is not as painful at the moment as it has been in the past — because inflation and wage growth are relatively low — this also means a permanent fix for bracket creep is not that expensive.

Indexing tax brackets for inflation would initially cost $2 to $3 billion a year, but would accumulate over time.

The government should continue to push for company tax cuts.

The economic case for a company tax cut is strong, and the benefits will flow through into wage increases across the income spectrum.

While the political consequences of the budget are almost always high, in this case the economic consequences are high as well. If the government has found a boost to revenue from improved economic conditions it must not squander the opportunity to undertake real reform. After all it might be their last chance.

Simon Cowan is Research Manager at the Centre for Independent Studies.