By Andrew Brown and Tess Ikonomou in Canberra

A larger-than-expected budget surplus is due to spending restraint by the government to improve the bottom line, the treasurer says.

Labor will hand down a $15.8 billion surplus for the 2023/24 financial year when the final budget outcomes are released on Monday.

It will be the second time in a row the government has handed down a consecutive surplus , the first time since 2007/08.

The federal budget was expected to record a $9.3 billion surplus for the financial year, but Treasurer Jim Chalmers said the improvement was due to lower government spending.

“The key to these two surpluses is the fact that when we’ve got upward revisions to revenue because the labour market’s been a bit stronger, or our exports have been performing well, we’ve banked almost all of those,” he told ABC Radio on Monday.

“If we hadn’t shown that spending restraint, we wouldn’t be anywhere near these two consecutive surpluses for the first time in almost two decades.”

The government returned 87 per cent of revenue upgrades to the budget last financial year since the pre-election economic and fiscal outlook.

Payments as a share of gross domestic product in 2023-24 were 25.2 per cent, lower than the 27.1 per cent previously forecast.

The surplus is expected to make up 0.6 per cent of the nation’s total economic output.

The treasurer said while commodity prices had been higher, they were not the only factor behind the surplus.

“The improvement from our expectations of the surplus in May to the final budget outcome that we’re reporting today is not about more revenue, it’s not about higher commodity prices, it’s not about more taxes – it’s about the less spending,” he said.

“We always take a deliberately conservative approach to commodity prices, and that’s been warranted.”

While consecutive surpluses have been locked in, the government has forecast a deficit of $28.3 billion for the 2024/25 financial year.

Figures on the deficit will be released in the mid-year budget update, which will be handed down in December.

Opposition finance spokeswoman Jane Hume said higher deficits were on the way and the extent of the surplus was exaggerated.

“It looks like those surpluses that Jim Chalmers has delivered have been delivered not by his hard work but by (taxpayers’) hard work,” she told Sky News.

“Jim Chalmers inherited a strong economy with low levels of unemployment, and in fact, we’ve seen a deteriorating position since then.”

While the government has been talking up the surplus, Tasmanian senator Jacqui Lambie said the improved budget bottom line did not mean much for people dealing with the increased cost of living.

“People are doing it hard out there. Nobody”s talking about a surplus,” she told Nine’s Today program.

“If they were, and they truly understood that, well how about you put some of that surplus out to us so we can put bread and milk on the table for our kids and do that without raising inflation.”

Analysis to be released in the final budget outcome is expected to reveal less revenue generated from taxes and payments.

The Australian economy hasn’t experienced such weak economic growth since the recession of the 1990s, excluding the COVID-19 pandemic.

As households across the country continue to feel hip pocket pain, Labor is hoping the Reserve Bank will deliver a rate cut ahead of the federal election, which must be held by May.

Finance Minister Katy Gallagher said the government had exercised fiscal discipline and reduced “wasteful spending”.

“Posting back-to-back surpluses is a key part of our plan to take pressure off inflation while providing relief to families, who we know are under pressure,” she said.