Australian Treasurer Joe Hockey has delivered the country’s budget, promising to help small businesses and ensure parents can join the workforce.
The budget also included a boost in national security spending.
It has largely been seen as attempt to win back public support in the lead-up to the 2016 election.
Last year’s budget was criticised for being too severe in its public spending cuts as the government tried “to end the days of borrow and spend”.
Several of those measures, such as pension cuts and fees to visit the doctor, have since been dropped or have been blocked in the Senate.
Australia’s economy has been slowing amid a downturn in the mining industry.
Mr Hockey described the country’s transition away from mining to one of “broader-based growth” as difficult.
The latest budget papers showed Australia’s deficit for the 2015-16 financial year is estimated to reach 35.1bn Australian dollars ($27.96bn; £17.82bn).
The market had expected a deficit of some A$41bn for the period.
The country was nevertheless still on “a credible path to surplus”, despite the price of iron ore almost halving since the previous budget and an A$52bn write‑down in tax receipts.
The budget papers also showed the deficit was projected to fall to A$7bn by the end of the 2018-19 financial year.