The Federal budget has improved by almost $10 billion in just two months, creating a war chest for the Turnbull government's pre-election income tax cuts, affectively halving this year's deficit, and potentially allowing it to announce an early return to surplus.

However, it is understood the government is very unlikely to bring forward its first surplus from 2020-21 to avoid repeating the dashed promises of both the former Labor government and the early years of the Coalition's time in office.