The process results in those at the higher end of middle-income groups eventually slugged at a higher rate, despite not gaining any new purchasing power.

In a reversal that reflects the election campaign significance of the budget, the government is preparing to lift the current $80,001 threshhold above which dollars earned are taxed at 37¢ to a higher income cut-in.

The Assistant Minister to the Treasurer, Alex Hawke, confirmed the government was "absolutely" looking at ways to better manage taxation and lower the tax burden on ordinary Australians.

"We've said consistently that we're concerned about the impact of bracket creep," he told Sky News. "The government will continue to look at that issue and ensure to do all we can to address bracket creep and remove that burden."

But Mr Hawke warned changes would be modest, saying: "We have to take those decisions you can afford."

While the income point remains unknown, the decision exposes an at times confused pre-budget period, during which an array of tax reform options have been floated, only to be later dismissed.

But with less than a week to go to the budget on May 3, the move against bracket creep is back.

That would deliver a windfall gain for very high income earners, who already stand to benefit from the July 2017 expiration of the three-year 2 per cent temporary deficit repair levy imposed by the Abbott-Hockey administration.

The levy applies exclusively to those earning more than $180,001, and means that high income earners currently pay 49¢ in the dollar when the Medicare levy is added to the 45¢ top bracket.

According to assessments by economists, even a modest rise in the second highest threshhold from $80,001 to $85,001 would disproportionately benefit these earners due to a drop in their liability from 37¢ presently to 32.5¢ for all income earned between $80,001 and the new threshhold.

That benefit could be as high as $225 a year just for that change to $85,001, while those who never reach the higher tiers of income would receive nothing.

It remains possible the government could go much further by lifting the threshhold from $80,001 to $100,001 in one leap. The cost of this would be close to $2 billion. More likely is an incremental rise.

Economists say raising the threshold by a mere thousand dollars to $81,001 would cost $130 million, and raising it to $83,000 would cost about $375 million "in today's terms".

But with wage inflation running at very low levels, the costs to the budget are not considered prohibitive.

Politically, however, upwardly adjusting the rate for middle to high income earners carries the risk of being seen to help the wealthy ahead of the poor. That is why other changes in the budget - most likely affecting the favourable taxation of discretionary superannuation contributions for high income earners - are expected to be wound back.

Since replacing Tony Abbott in September, Prime Minister Malcolm Turnbull has repeatedly stressed the need for fairness in government policy - a direct reference to the most central criticism of the Abbott-Hockey 2014 budget, which was seen as harsh and profoundly unfair.

With Michael Koziol