An extra $36 billion will flow to federal coffers if record iron ore prices persist until Brazilian supply resumes at full capacity, giving the Morrison government extra financial firepower ahead of the next election.

Australia’s biggest iron ore rival, Brazilian miner Vale, does not expect production to return to full speed until the end of next year, suggesting Treasury can anticipate at least a further 18 months of iron ore prices above the $US55 a tonne currently forecast from the end of the September quarter.