The federal government on Friday released the final budget outcome for the past financial year, which showed a $54.8 billion deficit, or 4.2 per cent of gross domestic product (GDP). The result was a $2.3 billion improvement on the $57.1 billion deficit estimated at the time of the May budget.

Treasurer Wayne Swan said the smaller deficit reflected a combination of factors, including lower spending, reduced interest costs on borrowing, underspending in some demand-driven programs and the finalisation of some agreements with the states and territories.

He said in a joint statement with Finance Minister Penny Wong, "The final budget outcome for 2009-10 shows Australia's budget is in far better condition than the budgets of other comparable nations, putting us in a strong position to deliver a surplus in 2012-13."

Treasurer Swan, however, refused to speculate about returning the budget back to surplus even earlier on the back of surging commodity prices and the end of a long-running drought.

"We have put our forecast out there, we stick with our forecasts," he later said in Canberra.

According to Treasurer Swan, recent economic commentary had suggested the government was being too optimistic about forecasts for commodity prices.

"We don't count on commodity prices staying high forever," he said, noting that the government's commodities forecaster had predicted a rise in iron ore prices.

"The outcome for 2009-10 shows a small fiscal improvement from the estimate at the May Budget, but also highlights the fiscal consequences of the global recession."

The final budget result was due to lower-than-approximated cash payments - $2.6 billion. Cash receipts were also lower by $249 million, while total taxation receipts were $14 million higher than previously forecast.

The final outcome statement said the budget felt the full force of the global financial crisis in 2009/10, with 2009-10 revenues downgraded by almost $50 billion from pre-crisis levels.

The Treasury document released today said economic growth in Australia is "now strengthening and tax receipts are recovering."