Tony Abbott is planning a generous income tax package in the lead-up to the 2016 election in a bid to offset the pain of his austerity budget and win back disaffected voters.

But any personal savings would not show up in people's pay packets until after the election unless the economy surprises on the upside, wiping away a forecast $10.6 billion deficit when the election falls due in the third quarter of 2016.

Illustration: Matt Golding

Sources in the Abbott government say the promise of cuts - probably to take effect from July 1, 2017 - would still come earlier than those quietly factored in to the current budget papers from 2018-19 as part of a commitment to keep tax as a proportion of the economy to a maximum ''cap'' of 23.9 per cent.

The move to cut income taxes a year earlier represents the second half of a staged political strategy to give voters a ''pay day'' for the sacrifice of spending cuts and tax increases in education, health, petrol and income taxes for the rich.