Scott Morrison has held out the hope of personal tax cuts as Labor attacked his second budget for effectively giving a tax break to millionaires and big business while slugging everyone with an increase in the Medicare levy.
"In the future, the coalition government would love to reduce personal incomes taxes," the treasurer said during his traditional post-budget address to the National Press Club held in Parliament House.
"We did it last year, I would love to do it again when we are in a position to do that."
Tuesday's budget numbers showed the government was living within its means and had charted a "fair and responsible" course back to balance.
It projected a return to balance in 2020/21, improving from a deficit of $29.4 billion to a projected surplus of $7.4 billion within four years.
This included a remarkable $20 billion drop between the deficits in 2018/19 and 2019/20 to a slim $2.5 billion deficit, raising eyebrows among economists.
Chris Richardson, from Deloitte Access Economics, said the improvement in the deficit had consistently been "wafer-thin, then ka-pow".
However, he was willing to forgive the forecasting for now, which includes an ambitious forecast wages growth of 3.75 per cent in 2020/21, almost double the rate now.
"Given we finally have a budget where its politics are better, maybe that will ultimately mean budgets with better economics," Mr Richardson told AAP.
The budget includes a $6 billion levy on the banks - which Labor will support - while increasing the Medicare levy from two to 2.5 per cent in two years to help pay for the national disability insurance scheme.
Labor has yet to make up its mind on the latter measure.
Both measures also help replace the $13 billion hole left by dumping the so-called "zombie" measures that have been stuck in the Senate since 2014 because of opposition by Labor, the Greens and many on the crossbench.
Social Services Minister Christian Porter formally scrapped the measures on the floor of parliament on Wednesday.
The deficit levy on high-income earners from the 2014 budget also ends on June 30 as legislated, even though the budget remains deep in the red.
The government will also reintroduce the remainder of its 10-year business tax plan to get the corporate tax rate down to 25 per cent for all businesses.
Mark Molesworth, a tax partner at business consultants BDO, described it as a "bland budget" in which the government did something on housing affordability without a general cut back on housing tax concessions.
"It's a bit of a quick sprint to the finish line for housing affordability but still an endurance race for any real tax reform," he said.
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