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Frydenberg hints at good budget news

Treasurer Josh Frydenberg has hinted the federal budget could return to surplus sooner than expected after the release of strong economic growth figures.

The economy in 2017/18 expanded at its fastest pace since the mining boom six years ago, beating financial market expectations.

Asked if that meant the budget could be back in the black sooner, Mr Frydenberg said: "The numbers were better than expected and that will flow through in the final budget outcome".

"I will release a final budget outcome later this month and certainly that (data) was good news for the budget," he told the Nine Network on Thursday.

The budget is currently forecast to return to surplus in 2020/21.

Despite the rosy national figures, wage growth remains stubbornly flat and cost of living pressures continue to climb.

While businesses are increasingly profitable, house prices are also falling and Australians are increasingly drawing down on their personal savings.

Mr Frydenberg is taking solace in the fact more women and both older and younger people have found work in the past year.

He is confident wages will gradually grow as domestic labour market gaps are plugged.

"As this employment growth continues to take hold, we will eat into that spare capacity, we'll see a tighter labour market, companies competing for labour, and that's where the Reserve Bank says real wages will gradually increase."

Labor spokesman Jim Chalmers said that line of thinking had not proved true so far and many Australians are experiencing a different economy to the one the treasurer is so pleased with.

"People are increasingly dipping in to their savings to fund consumption because they're not getting the income growth that they need and deserve," he said.

"People who are working so hard in our economy - or would like to work more - need to have more of a stake in our national economic success."

Austrlaian Associated PressBack to Breaking News

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