Workers will receive a modest tax cut of $536 a year in a surprise announcement in Tuesday’s budget, taking to more than $30 billion the cost-of-living assistance promised by the Albanese government as it prepares to call an election within days.

But the announcement of the tax cuts, which will be phased in from July 1 next year and equate to $10.30 a week by July 2027, set up an immediate election fight after the Coalition vowed to oppose them.