According to Deloitte Access Economics' latest business outlook, the territory sprinted to the "top of the leaderboard" in 2017, with gross state product rising by 4.6 per cent.

The picture was similiarly rosy for the rest of the country, as revenue "rained" back into Commonwealth coffers for the first time since 2012.

"Tariff wars be damned. The real story is excellent global growth," the report said.

"The bad news of huge falls in mining-related construction has passed, and the long-awaited pick up in wage gains is beginning, spurred along by good profit growth and by the scorching pace of job gains...The long-awaited surge to surplus is a happening thing."

In the capital, Deloitte partner Chris Richardson said low interest rates had given the ACT's "massive mortgage belt" some breathing space.

"There's two big levers at play in Canberra: the size of the public service and interest rates," Mr Richardson said.

After bearing the brunt of government cut backs in recent years, Canberra's public sector was now in the sweet spot, he said.

"Consistently it's been said there's a risk of more federal government cuts, I'd say that's still true but the budget is looking better," he said.

"For the first time in seven years, there's some money in the federal bucket, and while much of that money will be set aside for personal income tax cuts, the risk of more public service cuts are history right now.

"Canberra wins when we spend more and tax more."

But, given 40 per cent of the federal public service lives in Canberra, decentralisation "remains a key risk", the report warned.

Mr Richardson said small businesses "shouldn't sweat" just yet, while gridlock in the federal parliament kept the "Barnaby impact" at bay.

The public service remained a key source of ACT employment growth, he said.

"And that sector is likely to continue skyrocketing, alongside the small but burgeoning space industry".

The territory also had the second lowest unemployment rate in the country.

Jobs growth nationally had been "extraordinary", at 367,000 in the past year, and would soon transform itself into higher wage growth.

Wage growth has been stuck at a long-term low of around 2 per cent for two years.

Mr Richardson said around the world increasing demand for labour had been showing up as gains in employment rather than wages. Now, as supply of potential workers runs low, wage growth will climb.

But the ACT's rapid gains are tipped to slow to a more modest clip by the end of the year. Gross state product will fall and South Australia should overtake the ACT as Australia's fastest growing economy, Mr Richardson said.

Canberra's booming market in international education and IT as well as the roll-out of major public infrastructure such as the light rail would continue to keep the capital's economy "solid".

International students currently contribute more than $750 million to territory each year, and that number looks set to rise as more students flock to the capital.

"There might be some short term capacity questions as the ANU does some renovations but overall, it's booming," Mr Richardson said.

ACT Chief Minister Andrew Barr said he agreed with Deliotte that the capital's economy was "sprinting" ahead.

While Mr Richardson said "a lot of things are going the Treasurer's way", he expressed caution at the government's intentions to introduce personal income tax  cuts.

Analysis by Fairfax Media suggests Treasurer Scott Morrison will have at least $8 billion per year to spend on tax cuts, $5 billion from projected higher tax revenues, and $3 billion from projected lower spending.

Eight billion could buy a $5000 lift in each of the top three income tax thresholds or a cut of one percentage point in each of the four tax rates.

The 32.5 per cent threshold would climb from $37,000 to $42,000, the 37 per cent threshold from $87,000 to $92,000 and the 47 per cent threshold from $180,000 to $185,000.

In its pre-budget submission the Australian Industry Group called for tax cuts be concentrated on lower and middle-income households who it said were most in need of relief.

Labor finance spokesman Jim Chalmers said the Deloitte report showed the budget would have no excuses for record or growing debt.

“The Budget a mess on the Liberals’ watch because they insist on giving the biggest tax breaks to those who need them least, including a $65 billion tax cut to multinationals and the big banks,” he said.