The budget will invest $18.6 billion in extra funding to schools over the next 10 years.

Banks will face a new tax that is expected to recoup $6.2 billion over the forward estimates and help to fix the budget.

In a budget that targets the Turnbull government’s future election prospects as well as much-needed fiscal fix – finally putting to rest the ghosts of Joe Hockey’s politically toxic “lifters and leaners” budget of 2014 – Treasurer Scott Morrison described the 2017 budget as a “reset”, and emphasised this was a budget for “right choices” and “fairness”.

“The only people that will pay more tax on July 1 are banks and multinationals”, Mr Morrison said.

Under new measures, banks with liabilities of more than $100 billion – Westpac, ANZ, Commonwealth, National Australia Bank and Macquarie Group – will be slugged 0.06 per cent on those liabilities each year from July.

There will be tougher rules for foreign investors in the housing market.

They also remain in the dark over which commercial activities will be captured by the tax.

Treasurer Scott Morrison promised to deliver a small A$7.4 billion ($5.4 billion) surplus in 2020/21, an improvement on the A$1.08 billion it forecast in the mid-year review in December.

While Morrison has cautioned the banks that their customers “already don’t like them”, telling them to “prove (the customers) wrong and pony up to help fix the budget”, bankers have warned the government that it was likely that the levy will be passed onto customers. A hostile Senate blocked several key planks of that budget.

He would not say whether he would retain last year’s target of returning the budget to surplus in 2020-21.

Borrowing would be limited to spending on capital works – infrastructure counted as assets and thus removed from debt calculations.

“This is good, common-sense financial management”, Mr Morrison said.

“We’re not sure the case is made just to automatically increase the taxes for everyday Australians”, he told Channel Seven on Wednesday.

“I know this has put real pressure on Australians and on their families”. Terribly, this has meant some families have even broken apart.

“I believe though that we are now moving towards the end of this hard period”.

“If we continue to see sustained cuts to health funding in tonight’s Budget, it will translate into fewer doctors and nurses on the front line, fewer of the services they deliver, and longer waiting lists that will follow”.

“The Treasurer has jettisoned decades of conservative fiscal orthodoxy around deficits and, particularly, debt”, said business commentator Ian Verrender on the ABC News website.

Surging house prices, primarily in Sydney and Melbourne, have taken homes out of reach of many young Australians. It will also improve the Pharmaceutical Benefits Scheme which subsidises medicines.

Mr Turnbull said it would have been impractical to have increased taxes on high-income earners only because of the amount of revenue needed.