TREASURER Scott Morrison has revealed Australia's federal budget is $4.4 billion better off than forecast five months ago.
Australia's final budget deficit for the 2016-17 financial year was $33.2 billion, down more than $4 billion from the $37.6 billion outlined in the May budget.
Federal government spending on social services, border control and the National Disability Insurance Scheme has been lower than expected.
Mr Morrison told reporters in Sydney the government's disciplined approach to financial management had been "successfully de-risking the budget".
"We have had to deal with changes to what has happened on revenue but all along the line we have been holding firm to keeping expenditure under control ... and we have been doing that by having sensible and constructive forecasts and realistic estimates of where things are going," he said.
"That is one of the key reasons why Australia to date has been able to maintain our credit rating because we have been transparent about this process.
"We have been realistic."
Mr Morrison said the biggest contributor to the government's reduction in spending had been a $5 billion cutback in spending on social services.
Spending on Australia's border control measures, particularly for "onshore compliance" and detention numbers, were also lower than expected.
Employment services also cost less than expected, as did the NDIS due to lower than estimated payments which reflected a more gradual uptake of the scheme than expected.
Mr Morrison said government expenditure had held steady since 2013-2014.
"However, revenue has come down $22.9bn over the same time from that original estimate from our first MYEFO," he said.
"I stress this, in Labor's last budget they were forecasting revenue that ultimately proved to be $43.7bn higher than what the final budget outcome for 16-17 has produced.
"Now revenue was up $4.1bn on the last estimate we provided for the 16-17 year in the budget but was down around just over $1bn from what we announced on budget night in 2016-17.
"What this shows is that the government has been keeping expenditure under control."
Finance Minister Mathias Cormann said the latest figures showed the government was continuing to repair the budget by getting spending growth under control.
"What these numbers also show is that this is not the time to shift to Bill Shorten's anti-business, anti-growth, anti-opportunity agenda," he said.
Senator Cormann warned Labor's economic policies would lead to less growth, fewer jobs, lower wages and "a worse budget outcome for Australia".