Surplus in sight but treasurer plays down final number

A second year in the black is in reach yet Treasurer Jim Chalmers warns a softer tax take could whittle down the final surplus figure.

A federal budget surplus of $9.3 billion was forecast in the May budget for the 2023/24 financial year - the second in a row - and Dr Chalmers says it's still on track to stay out of the red.

With inflation proving persistent, the federal government is under pressure to prove it's doing its bit to combat price growth and the treasurer says another surplus will be viewed favourably by the Reserve Bank of Australia.

Previewing Friday's update on the government's financial position as of May, Dr Chalmers will manage expectations about the final number with a month to go.

The federal government is under pressure to prove it's doing its bit to combat price growth. (Lukas Coch/AAP PHOTOS)

"The high figure you'll see published today isn't necessarily where we'll end up," he will say in a speech to the Citi A50 Australian Economic Forum in Sydney.

"Some softness in our tax take, when compared to payments, might still result in a surplus that's a bit smaller or a bit bigger than we forecast in the budget."

His remarks will follow a higher-than-expected four per cent rise in inflation in the 12 months to May, which had markets pricing in a 37 per cent chance of an interest rate hike at the next meeting.

For financially-stretched borrowers, much is riding on the quarterly inflation print at the end of July, with another strong reading to push easing further into the distance and might even prompt a hike.

Attracting investment to Australian shores was also a dominant theme of the treasurer's speech, with the Future Made in Australia legislation to be introduced into parliament next week.

Production tax credits worth $13.7 billion for hydrogen and critical minerals were the centrepiece of the wide-ranging industry policy plan, with consultation on the key policy due to begin on Friday.

"Our production tax credits will incentivise investment in renewable hydrogen, boost production of critical minerals and create jobs and opportunities for Australians," Dr Chalmers will say.