Roundup: Small businesses, young families expected to win in Australia's 2015-16 budget

Fewer Australians will receive the age pension and family tax benefits but small businesses, young families and the defense force will be celebrating when Treasurer Joe Hockey releases his second budget on Tuesday evening.

Hockey will continue the recent narrative that China's demand for iron ore has gone from boom to bust which has led to a reduction in government revenue but savings measures have been found to pay for some incentives aimed at winning back disillusioned voters following the ill-received "budget repair job " last year.

The emphasis this year on families and increasing long-term productivity through parents returning to work sooner, big companies paying more tax and well-off seniors paying their own way has received cautious support from voters.

The budget's headlining act is a 3.5 billion AU dollars (2.8 billion US dollars) childcare package over four years. However, its funding relies on a cut to the families tax benefit once children reach primary school - a move unpopular with the most of the Senate crossbench.

The package will see families earning up to AUD 65,000 (about 51,350 U.S. dollars) receiving 85 percent of the childcare cost per child, with the payment rate dropping to 50 percent for families earning more than 170,000 AUD (134,300 U.S. dollars).

Meanwhile, parents unable to move back into employment will be offered support, training and jobs.

New parents double-dipping on paid parental leave provided by employers and the government will be stopped if their employer pays higher than the government scheme. The crackdown could save 1 billion AUD (790 million dollars) per year.

Rich retirees will have their part-pensions reduced or removed when the government introduces an assets test to the age pension.

The test that will exclude owner-occupied homes, will deliver savings of 2.4 billion AUD (1.9 billion dollars) over four years.

The Netflix tax, which will widen the scope of the 10 percent goods and services tax to online subscriptions and e-books, will get the go-ahead but the Google tax, which hoped to force multinational companies to pay a more appropriate level of tax, will remain at the planning stage.

There will be a crackdown on companies which attempt to shift profits offshore.

The corporate tax system will however have a big change introduced with small businesses receiving a tax cut of 1.5 percent to 28.5 percent to create a two-tier system.

Defense spending will increase due to the war against Islamic State and an lifting of defence workers' pay increases by half a percent.

Public service workers will not be so lucky with more cuts slated to fulfill the government's promise to cut 16,500 Commonwealth jobs.

In the health portfolio, 485 million AUD (383 million dollars) will be used to resuscitate the failing e-health system by transferring Australian health records from paper to electronic and enforcing an opt-out approach instead of opt-in.

Savings of more than 3 billion AUD(2.37 billion dollars) over five years will be made with cuts on the subsidies on medicines.

Despite the savings across the board, Hockey is expected to deliver a deficit of around AUD 47 billion (37.1 billion dollars), the eighth budget deficit in a row.

Nosediving iron ore prices have cut billions in government revenue while last year's cuts to services and expensive schemes were as unpopular with the Senate as with the electorate.

In the Senate, where the government must gain the support of the Opposition or six of the eight crossbenchers, many of the government's tough budget measures failed at this final hurdle or were subject to huge concessions.

The government knows too well that it wants and the eventual shape of its policies after being screened by the Senate can be two entirely different things. Endi