Joe Hockey strode into Parliament House in a buoyant mood just hours before delivering a budget that could determine his political fortunes and those of the government.

If the Treasurer is worried about his job after the dismal response to his first budget a year ago, he wasn’t about to show it.

Hockey was able to boast the budget deficit will be smaller than the near $41 billion economists have predicted and small business will get the much-promised 1.5 per cent tax cut, as well as a range of other tax concessions.

And his mood was lifted further by a schoolgirl grabbing a selfie souvenir as she interrupted his traditional pre-budget press conference this morning.

“I don’t want to feel like Kevin Rudd,” Mr Hockey jokingly told reporters, insisting the photo opportunity was not a set-up.

Sixteen-year-old Anika Buining, from Hunter Valley Grammar School, was thrilled.

“Thank you so much. Good luck with everything tonight,” she told the Treasurer after snapping a picture.

Now Hockey just has to satisfy the other 23 million Australians.

The success of his budget would be judged by whether voters saw it as responsible, measured and fair, he said.

The lower-than-anticipated deficit for 2014/15 will be a good start. “We’re going to beat that and we’re going to beat it every year,” Hockey said.

The more positive outlook comes despite the Government having been forced to write off $90 billion of expected revenue.

“Yet we are still on a credible trajectory back to surplus,” the Treasurer said.

As of March, the underlying budget deficit was running some $4 billion smaller than had been predicted after nine months.

Revenues will also not be as bad as earlier feared with the unemployment rate being lower than the 6.5 per cent forecast in the mid-year budget review, while iron ore prices have bounced back above $US60 per tonne.

Small Business Minister Bruce Billson said the budget’s small business package was about energising the sector.

“A delightful package, a delicious package … showing respect and reward and encouragement for those small businesses that are crucial to jobs and economic growth,” he said.

It was revealed overnight that a budget package to boost small businesses – including the tipped 1.5 per cent tax cut – will be extended more broadly in the sector, benefiting tradies and others, and that the Government plans to spend an extra $450 million on fighting terrorist propaganda and bolstering intelligence agencies.

Hockey will also release a draft of new laws – dubbed the “Netflix tax” – that would see GST applied to movie downloads, games and e-books bought from overseas.

But Labor frontbencher Brendan O’Connor was unimpressed, saying the Treasurer came into Government promising a surplus in one year, then three years and is now talking about a decade.

“I wouldn’t get too carried away by announcing there is going to be a deficit in the tens of billions of dollars,” he told Sky News.

Opposition Leader Bill Shorten, who is celebrating his 48th birthday on budget day, rallied his Labor troops by claiming credit for the defeat of many of the controversial measures contained in last year’s budget.

“We have most certainly fought for fairness for all Australians,” he told a meeting of the Labor caucus in Canberra this morning, citing stalled indexation changes to the aged pension and the abandoned GP co-payment.

“Australians still, though, experience the calamitous and the shocking damage to the national confidence of the 2014 budget.”

Mr Shorten likened Prime Minister Tony Abbott and Treasurer Hockey to leopards unable to change their spots, saying they may change their tactics but the destination remains the same.

“A bleaker, meaner, narrower, more unequal society,” he said.

Mr Shorten questioned the byword for the Government’s second budget – fairness.

“Fairness is not what you say one night in a year and it’s not using a word count on a computer to see how many times it appears,” he said.

Other details of the budget which have already been revealed include:

• Major $3.5 billion reform to child care, with single payment paid directly to childcare centres to reduce parents’ upfront costs. Stay-at-home parents with a family income more than $65,000 will no longer secure childcare subsidies.
• Loophole that allows new parents to claim paid parental leave payments from both the federal government and their employer will be closed, saving nearly $1 billion a year.
• Tighter access to age pension. Part-pension assets test (excludes family home) will be cut to $820,000 for couples.
• Drought package including $250 million for the drought concessional loan scheme in 2015-16, and $35 million to boost economic activity in badly hit towns and regions.