Chalmers expected to deliver Budget surplus

Treasurer Jim Chalmers is expected to deliver a surplus in the upcoming Federal Budget, but he warned iron ore prices and a softening labour market put a dent in how large it will be.

Speaking at an event for the Committee for Economic Development of Australia, Chalmers said many of the big Budget announcements have already been made, including the stage three tax cuts and superannuation on paid parental leave.

In addition, the government has also planned big spending for aged care, the expansion of the NDIS and university funding.

"The revenue upgrades will be smaller. In each of our first two budgets, we benefited from more than $100 billion in revenue upgrades. This year, we won't see anything like that," Chalmers said.

"In fact, we are even looking at much less than the $69 billion we booked in the latest mid-year budget update."

In the 2023-24 Mid-Year Economic and Fiscal Outlook (MYEFO) the government revealed a deficit reduction of $1.1 billion, an improvement of $12.8 billion from earlier projections.

Since the last election, the government has identified $49.6 billion in savings, leading to a cumulative improvement of $211.4 billion in the underlying cash balance over the next five years.

The economy is expected to expand by only 1.75% in 2023-24, before regaining momentum in 2024-25 as improving real incomes growth support a recovery in household consumption.