Despite record spending to save Australians' livelihoods and businesses during the COVID-19 pandemic, the deficit has shrunk stunningly fast, said leading economist Chris Richardson from Deloitte Access Economists. This was largely due to "stratospheric" rise in commodity prices including iron ore, coal and gas.

The new forecast comes from the Deloitte Access Economics Budget Monitor on Monday, which the Treasurer called a "further vote of confidence in Australia's economic resilience".

The opposition observed from the same report that Australia will again benefit from being a lucky country in a commodity price boom rather than clever planning, but more needs to be done about falling real wages.

To repair the hole in the budget, Mr Richardson said the government needed to find more than $40 billion in savings by 2026, which will coincide with scheduled final stage three tax cuts for 2024-25 that will cost more than $21 billion a year.

"It's not the economics that's the tricky bit - it's the politics," he said. "Neither side of politics will talk about this challenge - certainly not this side of the election, and probably not afterwards either."

Mr Richardson said the Reserve Bank of Australia should respond to the fast-repairing economy by raising interest rates. He cautioned the government against extending a double-up in income tax cuts.

Warning that Australia could be headed to repeat the "dumbest" budget decisions next week, Mr Richardson observes decisions made before an impending electoral defeat citing the Coalition's tax cuts in 2007 and Labor's spending programs in 2013.

"With the government trailing badly in the polls, there's a risk the next few weeks see similar promises that are, frankly, bad," he said.

Many new promises could be small, but "since there's nothing more skittish than an opposition leader with an almost unbeatable lead," Labor would likely give the thumbs up to such promises, he said.

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Treasurer Josh Frydenberg noted that Deloitte was forecasting unemployment to reach a 50-year low, which could drive wages growth to the strongest levels in a decade.

"We've readily accepted the challenge set by Labor's shadow treasurer Jim Chalmers, who said 'what happens to jobs' is 'the biggest test for this government's management of the recession and its aftermath'," Mr Frydenberg said.

Mr Chalmers and shadow finance spokeswoman Katy Gallagher said next week's budget wouldn't be about getting Australians through tough times or setting the country up for a better future. "It'll be all about getting the Liberals and Nationals through an election," the pair said in a statement.

"The budget might be recovering because of commodity prices but Australians facing skyrocketing costs of living and falling real wages are still being left behind."

"It speaks volumes that Scott Morrison and Josh Frydenberg take credit for this improvement but won't take responsibility for a trillion dollars in debt or falling real wages."