The federal budget has returned to its best position in more than a decade on the back of soaring iron ore prices and a strong jobs market.

Treasurer Josh Frydenberg on Thursday revealed the 2018-19 budget showed a deficit of $690 million, which in accounting terms is a balanced budget.

Treasurer Josh Frydenberg said the government's "strong fiscal management has put the budget on a sustainable trajectory". Credit:Alex Ellinghausen

In April, the government was expecting the 2018-19 budget to show a deficit of $4.2 billion.

The last budget surplus, of $19.7 billion or 1.7 per cent of GDP, was in 2007-08. Thurday's budget is the first time it has been balanced since the global financial crisis.