AN UNEXPECTED surge in the global iron ore price has put the budget surplus back within reach.

The iron ore price had climbed from a September low of $US86 a tonne ($A81.60) to $US135 at the time Treasurer Wayne Swan abandoned his commitment to a budget surplus in late December. It has since climbed to $US158.

Forecasters from Deutsche Bank are expecting it to hit $US170 a tonne within weeks. If sustained, the near doubling of the iron ore price would boost company tax revenues and lead to a surge in mining tax payments, putting government revenue back to near what was forecast in the May budget.

In abandoning his commitment to a surplus in December, Mr Swan stressed that he was only doing so because revenues had collapsed and he would continue to restrain spending so that if revenues recovered, a surplus would still be possible.

He asked ministers after Christmas to find spending cuts to fund new priorities. Although the letter did not mention the priorities by name, they include the multibillion-dollar National Disability Insurance Scheme and Gonski education reforms.