Federal surplus to rocket past earlier forecasts

Surging company and personal taxes are expected to feed in to a bigger surplus than first forecast. (Lukas Coch/AAP PHOTOS) (AAP)

The federal budget is on track to smash its earlier surplus forecasts as the government rakes in much more revenue.

The underlying cash balance for the 12 months to May was $19 billion, well above the $4.2 billion surplus flagged for the 2022/23 financial year in the last federal budget.

Official Department of Finance monthly figures released on Friday showed surging company and personal taxes, driven higher by strong commodity prices and the robust labour market.

Rich Insight economist Chris Richardson said the figures were a reminder of how "how lucky the Lucky Country has been".

"Conditions have thrown money at the taxman," he said.

Economist Chris Richardson says the forecast surplus shows 'how lucky the Lucky Country has been'. (Mick Tsikas/AAP PHOTOS) (AAP)

"Partly that's as war drove up commodity prices, and partly it's as inflation took money from the punters and placed it into the pockets of the government and of business."

He said the May numbers did not shift the overall budget story of a short-term sugar hit followed by longer-term structural problems, but did suggest official forecasters had dramatically underestimated the temporary boom.

Finance Minister Katy Gallagher said the figures showed the government was on track to deliver a much bigger surplus than the slender $4.2 billion forecast in the May budget.

"With one more month of data to come in, the monthly financial statements show that we're tracking towards a stronger surplus than forecast in the May budget thanks to the responsible, methodical approach we've taken to managing the economy," the minister said.

"This will help us to take some of the heat out of the inflation challenge in our economy, rebuild our fiscal buffers and clean up the mess left to us by the Coalition."

Treasurer Jim Chalmers had foreshadowed the possibility of a bigger surplus than the $4.2b forecast. (Lukas Coch/AAP PHOTOS) (AAP)

Shadow Treasurer Angus Taylor said Labor needed to deliver a plan to drive the budget back into the black in the long term.

"A drover's dog could have delivered a surplus this year," Mr Taylor said.

"The challenge for Labor is whether it can deliver a path to surplus over the forward estimates."

He said the surplus had been largely driven by conservative forecasts "but we'd prefer if it was conservative with its spending."

"If you spend more, you make inflation worse. It's that simple."