Labor has made a $5 billion pitch to its heartland, splashing cash hand-outs and tax breaks on families and low income earners in the federal budget.

But the bonanza has come at the expense of business with the government abandoning its promised one per cent company tax cut.

With the twin scandals of stood-down Speaker Peter Slipper and former Labor MP (and newly minted crossbencher) Craig Thomson bogging down the Gillard government, Labor's budget message was squarely aimed at the ''battlers'' - virtually the only winners in a budget that clawed back $33.6 billion in savings.

Handing down his fifth budget, Treasurer Wayne Swan fulfilled his most ardent political promise and announced a $1.5 billion surplus for the coming financial year – the first surplus Labor will have delivered since coming to power in 2007.

''The deficit years of the global recession are over,'' he said. ''The surplus years are here.''

With tacit reference to the carbon tax and acknowledging many households were facing increased electricity, housing, grocery and petrol costs, Mr Swan said his budget was designed to ease the cost-of-living pressures on ''working families'' by ''spreading the benefits of the boom''.

But hauling the budget back into the black and easing the concerns of Labor's traditional voter base comes at a heavy cost for the corporate sector.

The government had proposed reducing the corporate tax rate by one per cent to 29 per cent which was to be funded from the profits of the mining resource rent tax.

Instead, the profits of the mining tax are to be funnelled into a $3.6 billion fund for cash handouts and tax breaks for families, low income earners and the jobless, as well as a new tax write-off for small businesses.

In a swipe against mining billionaires like Andrew Forrest, Gina Rinehart and Clive Palmer, Mr Swan announced his ''Sharing the Benefits of the Boom'' strategy. More than 1.5 million Australian families will share in $1.8 billion worth of tax breaks to Family Tax Benefit Part A while $1.1 billion was allocated for a supplement of up to $210 for those living on income support.

"Our company tax cut has been rejected in full by the Liberals and Nationals, and in part by the Greens," Mr Swan said. "The funds for the company tax cuts have been redirected to families in a way that also helps the economy, including small business.''

But small businesses received a consolation prize, with $714 million allocated to allow for the offsetting of tax losses of up to $1 million against previous years.

The 400, 000 Australians living with a significant and permanent disability were not overlooked in what Mr Swan described as ''a Labor budget to its bootstraps''.

The National Disability Insurance Scheme is one step closer to fruition with $1 billion allocated over four years for the rollout of the first stage of the project.

From July 2013, an NDIS will begin operating in four yet to be announced locations across Australia, with 10,000 people expected to access the scheme.  This will expand to 20,000 people from mid 2014.

The government will crackdown on superannuation tax breaks for the wealthy, with people earning more than $300, 000 losing their concessional benefits while 3.6 million low-income earners will pay little or no tax on their contributions.

The demand made by Labor's minority government partner, the Greens, for funds for a Denticare-style scheme was partly fulfilled with $515 million for a blitz on public dental waiting lists, the relocation of dentists to regional and rural areas, and a funding boost for training of graduate dentists.

Two weeks ago, the government announced one of the budget's centrepieces — an overhaul of the aged care system with $3.7 billion allocated so older Australians can live in their homes for longer.

Cuts to the Defence Department accounted for almost $1 in every $6 saved by the government, with $5.45 billion stripped from the sector.

The government persisted with its anti-smoking crusade, slashing the inbound duty-free allowance for cigarettes and tobacco from 250 cigarettes to 50 and collecting a handy $600 million worth in savings.

Other key points of the 2012/13 budget were: 

·                  A modest tax cut for those earning up to $80,000;

·                  Superannuation guarantee rate rises to 12 per cent;

·                  National Health Reforms to provide $19.8 billion for public hospitals by 2019/20;

·                  Overseas aid funding increased by less than planned and deferred by one year - saving of $2.9 billion;

·                  Higher education to get $38.8 billion over four years with extra support for students from poorer backgrounds.

Mr Swan sheeted the blame for the scrapped company tax cut - a saving of $4.8 billion - to the Coalition.The Treasurer denied he had breached faith with the business community by walking away from his much promised tax cuts.

The Treasurer and Finance Minister Penny Wong had little good news for the bureaucracy with more than 4000 public service jobs to be cut in the next financial year.

Mr Swan defended his near-obsessive determination to deliver a budget surplus, saying they were important in a time when overseas economies face challenges.

Virtually every government department and portfolio had seen their spending reined in, Mr Swan said, in the clawback necessary to return to surplus.

Mr Swan said there had been around $150 billion lost in taxation revenue since the onset of the global financial crisis but that economic growth was on track for 3.25 per cent in 2012-13 and 3 per cent in 2013-14.

Federal Budget 2012 | Budget Gifts Mining Boom To Families