The upcoming federal budget won't be as draconian as some pundits suggest, Finance Minister Jim Flaherty said Thursday.

Flaherty made the comment in Toronto while talking about the Family Caregiver Tax Credit that went into effect Jan. 1 and was announced in the 2011 budget.

The federal budget expected in mid-March will focus on "moderate" measures to cut government spending and encourages provinces to do the same, he said.

"We are not one of the countries, many of them in Europe, that have run up deficits for a long period of time, accumulated substantial debt and must really act dramatically - some of them in a draconian way in order to get their house in order again," he said.

However, the government has already asked departments and agencies to cut spending by up to 10 per cent to save about $8 billion.

Flaherty dismissed the option of raising corporate taxes to pay down the deficit.

The budget is also expected to lay out the future of the Old Age Security benefit, possibly setting a timetable to raise the age of eligibility to 67 from 65.

Even though he was talking about the caregiver tax credit, there were no new announcements. Instead, Flaherty touted the government's work since 2006 to help families care for loved ones with disabilities.

CTV News Channel's Mercedes Stephenson said it's a typical government approach to rehash previous announcements before a new budget is unveiled.

"It's (tax credit) in the budget and some people may not be aware of it because they didn't see it. This isn't something that was a surprise or new," she said from Ottawa Thursday.

Reminding Canadians about previous tax-relief efforts, particularly ones aimed at seniors such as the caregiver credit, serves to soften the approach of what could be a fairly austere budget, she said.

"We certainly are expecting some very significant cuts. A lot of people are saying this will be the budget of the decade . . . in terms of how much we will see cut, up to 20 per cent possibly from some departments the rumour says," Stephenson said.

The caregiver benefit provides a 15 per cent non-refundable tax credit on an amount of $2,000 to caregivers of infirm, dependent family members, including "for the first time spouses, common-law partners and minor children," Flaherty said.

"We recognize the sacrifices many Canadians make to care for their loved ones and the expenses involved in doing so," he said.

"In addition to introducing the (tax credit), we also removed the $10,000 limit on the amount of eligible expenses a taxpayer can claim under the medical expense tax credit," he said.

Flaherty also talked about the introduction of the Registered Disability Savings Plan and the expanded eligibility of the disability tax credit.

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