Malcolm Turnbull's chances of delivering personal income tax cuts look more likely with new figures showing an improvement in the budget bottom line of almost $10 billion in two months.
In the mid-year budget review released in December the budget deficit was forecast to be $23.6 billion, down from $29.4 billion in the 2017 budget.
But the latest figures produced by the Finance Department on Friday show an underlying cash deficit in February of $19.75 billion.
The improving position is due to a rise in commodity prices and corporate earnings as well as the 400,000 jobs created in 2017 which boosted income tax receipts and kept a lid on welfare spending.
Company tax receipts are $3 billion ahead of the MYEFO forecast while income tax receipts are ahead by $1.25 billion.
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Government spending has also eased by about $800 million a month on MYEFO estimates.
Prime Minister Malcolm Turnbull said on Thursday the government was "increasingly confident" of the budget returning to surplus in 2020/21, when it could start to reduce debt.
