Scott Morrison is promising better times ahead, predicting strong wage growth as unemployment eases and the economy rumbles along at a spritely rate reaching three per cent.
If that happens budget deficits shrink from $37.6 billion this year to near balance in 2019-20 and a $7.4 billion surplus the year after.
"Tonight I announce a fair and responsible path back to a balanced budget," Mr Morrison told parliament on Tuesday.
"There is clearly the potential for better days ahead."
The economy is on course to complete a world record 26 years of uninterrupted economic growth in the next few months and, once it overcomes the impact of Cyclone Debbie, should be travelling at a rate of 2.75 per cent in 2017/18 before accelerating to three per cent until at least 2020/21.
The jobless rate will ease only slightly over that time towards five per cent, while inflation will be contained in the Reserve Bank's two to three per cent target band.
Wage growth is projected to accelerate to 3.75 per cent by the end of the four- year budget estimates, almost double the rate now.
The budget deficit has widened to $37.6 billion for 2016/17 from the $36.5 billion estimated in the mid-year update.
For 2017/18 the deficit comes in at $29.4 billion, and $21.4 billion the following year, before making a remarkable step-down to just $2.5 billion in 2019/20 and then posting the first surplus in 13 years at $7.4 billion in 2020/21.
Mr Morrison insists the government has arrested the growth in debt by more than two-thirds since coming to power in 2013, but will still top half a trillion dollars before June 30.
After that it grows to $606 billion by 2020/21.
Economic nuts and bolts aside, there is big spending in infrastructure and education, while the $13 billion in so-called "zombie" measures from Joe Hockey's ill-fated 2014 budget - stymied by the Senate - have been dumped.
There is a range of measures to tackle housing affordability, with an emphasis on stemming strong demand from foreign investors, while pensioners are being given inducements to downsize from the family home.
There is help for small business for a third year in a row with an extension of the $20,000 instant asset write-off, while wealthier pensioners are being given back their gold health card and getting one-off assistance for power bills.
To offset these goodies, the Medicare levy will be increased in two years to help fund the national disability insurance scheme while the big banks face a new levy to help repair the budget.
