A rebound in national income suggests Treasurer Scott Morrison will be able to report an improved budget bottom line when he hands down his mid-year review in December.
New figures show Australia's terms of trade grew for a second quarter in a row, after several years of decline in the post-mining boom era.
Export prices grew 3.5 per cent in the September quarter, the fastest growth in three years, and building on the 1.4 per cent increase in the previous three months.
Import prices fell for a fourth straight quarter, according to Australian Bureau of Statistics data released on Thursday.
"If export prices are outpacing the price of imports, this indicates a broad-based lift to incomes in Australia," Commonwealth Securities chief economist Craig James said.
He estimates the terms of trade grew around 4.5 per cent, the biggest quarterly gain in five years.
The terms of trade was predicted to rise by just 1.25 per cent in 2016/17 in the May budget, albeit coming off a 10.2 per cent drop in 2015/16.
It would be a further reason for the Reserve Bank to leave the cash rate unchanged at a record low 1.5 per cent at next Tuesday's Reserve Bank board meeting.
Wednesday's official inflation figures proved slightly more upbeat than expected, dampening the need for another rate cut for now.
JP Morgan economist Tom Kennedy said the performance of Australia's key commodity export markets suggests the terms of trade is likely to climb further in the December quarter.
"Spot coal prices have moved sharply higher since late September," he said.
"Given the preference of exporters to operate on quarterly contracts, it appears these gains are now partly crystalised from a terms of trade point of view."
Iron ore prices have also firmed.
The government's most recent monthly financial statement for September showed the budget deficit running at $20.9 billion after the first three months of the financial year, $1.9 billion smaller than had been predicted at this stage of the year.
The full-year deficit for 2016/17 was forecast at $37.1 billion in the budget.
