The federal government is "not currently working on" a new package of living cost relief despite expectations the budget surplus will exceed $20 billion, Treasurer Jim Chalmers has warned.
Official inflation figures due on on Wednesday are tipped to show household expenses climbed by more than 6 per cent in the June quarter, increasing the financial strain on families already feeling the pressure from rising rents and borrowing costs.
"The government's main focus is on providing cost-of-living relief by rolling out the commitments that we've made over our first two budgets. We're not currently working on a new package of cost-of-living relief," the treasurer told reporters in Canberra.
Earlier, Dr Chalmers revealed the budget was on track for a surplus even bigger than recently expected.
At its May budget, the government had forecast a 2022-23 surplus of $4.2 billion - the first in 15 years. That was recently upgraded to $19 billion and the treasurer said it was now projected to be "north of $20 billion".
The opposition has accused the government of adding to the nation's inflation through its spending, and has called on it to show much greater fiscal restraint.
The budget has benefited from surge in revenue from elevated company taxes and high personal income tax receipts due to historically low levels of unemployment, coupled with reduced demand for welfare assistance.
The labour market was "remarkably resilient", Dr Chalmers said. The unemployment rate has not exceeded 3.7 per cent so far this year and held steady at 3.5 per cent in June.
While high employment has helped households absorb soaring living costs, there have been calls for the government to do more to ease the financial strain.
But the treasurer said the government was focused on "rolling out" the living cost relief while building up its financial buffers against future economic shocks.
"What a much better budget position allows for is it gives you the flexibility down the track," he said.
The treasurer recently returned from a meeting of G20 finance ministers in India, held amid concerns about the outlook for the global economy.
While recession fears in the United States have eased in recent days, China last weak reported soft June quarter growth and Dr Chalmers warned that "there are risks in the global economy and we are not immune from those risks".
"The global economic challenges are substantial, and we expect the slowdown in our economy to be significant," he said.
Nonetheless, the treasurer confirmed the government still expected Australia to avoid a recession.