Better late than never.

Treasurer Josh Frydenberg this morning officially unsheathed the first federal budget surplus in more than a decade.

While it won't kick in until next financial year, the Treasurer has also triumphantly declared this year as a near miss, having whittled the deficit down to $5.2 billion.

Given it's only been a few months since greatness was thrust upon him, Mr Frydenberg could go down in history with a perfect record as Treasurer, depending on the outcome of next year's election.

Why has it taken so long to repair the Budget and finally emerge from the ashes of the global financial crisis?

A quick look at last year's Budget papers offers a compelling insight.

Revenue, as a percentage of GDP, has only just managed to climb back to the levels enjoyed by the Howard government.

That, in turn, offers a salient lesson for current and future treasurers.

Too often, fiscal policy has been employed primarily as a political tool to lure in voters rather than a crucial element in managing the economy.

If there's a lesson to be learned from the past decade and a half, it should be that it's a folly to use the proceeds of a short-term boom to permanently lock in revenue cuts or spending hikes.

How did we get here?

During the Howard era, cash from the mining boom flooded the nation's coffers. Revenue never once fell below 24.9 per cent of GDP and at one stage went as a high as 26 per cent.

As the 2007 election loomed, with surplus cash washing through the system, both government and opposition trampled over each other in an election race to slash personal income tax.

Mr Howard speaks during Question Time on February 12, 2007. ( Andrew Sheargold: Reuters )

None of us complained at the time. But the end result was that it skewed the tax system, making it far more reliant on capital gains and company tax.

A year later, when the financial crisis hit, the chasm opened wide. Corporate earnings, and hence corporate tax, were hammered. Massive stock market losses obliterated capital gains tax receipts.

In 2008/09, tax receipts crashed to 23.3 per cent of GDP. The following year it fell to 21.9 per cent.

For all the hullaballoo over spending, it hasn't fluctuated nearly as much as revenue. It jumped to 25.9 per cent of GDP during the emergency cash injections in the aftermath of the crisis. It has never once been below 25 per cent since the Coalition came to power in 2013.

It is revenue — and not spending — that has been the problem.

How the surplus was won

Two words; iron ore. And another; coal.

Commodity prices easily have outpaced the fairly conservative forecasts in May's Budget from previous treasurer Scott Morrison. It was a smart move, and not for the first time. It's always better to under-promise and over-deliver than announce an embarrassing and unplanned shortfall.

For most of the past six months, just like last year, iron ore exports have averaged well above the $US55 a tonne budget forecast. Every $US10 a tonne above the forecast kicks in about $1.2 billion in extra tax revenue.

Iron ore exports played a huge role in bolstering the nation's Budget. ( ABC News: Scott Ross )

Decent jobs growth and low unemployment along with a large boost to population has also swelled the amount of cash flowing in. October saw the smallest deficit in six years as receipts grew by 9 per cent, the fastest in 15 years.

Can it be maintained?

That depends on revenue growth.

Treasurers have always relied upon population growth and bracket creep to help ramp up the revenue. A bigger population means more workers. And if wages are kicking along at a decent clip, more of those workers are bumped up into higher tax brackets.

Sorry, this video has expired Why population growth is good for government and business but doesn't benefit everyone ( ABC News: Alistair Kroie & Carrington Clarke )

Bracket creep is a Treasurer's secret weapon. It delivers windfall gains for very little effort and in an election year, offers a wonderful opportunity to give the electorate exactly what they need; tax relief.

In last May's Budget, then-treasurer Scott Morrison outlined a bold plan to radically alter the income tax brackets — removing one completely — which essentially would provide a much flatter tax system but one that was far less progressive.

But it comes at a massive cost. Mr Morrison let slip that over 10 years, the restructure would denude the Budget of about $140 billion. Most of the cost is pushed out to the four years beyond 2022, guaranteeing a funding crisis for whoever is in power at that time.

The then-treasurer claimed an urgent need to ease the burden of bracket creep.

There is, however, an easier way to eliminate bracket creep altogether without costing the Budget a cent. All that needs to be done is to index wages to inflation. As wages rise, so do the brackets. Simple, really.

What about the economy?

That's a where we may have problems. Back in May, the Federal Government estimated real GDP growth at 3 per cent for the next four years. But the most recent reading for the September quarter came in well below expectations at 2.8 per cent and the outlook suddenly is looking far less rosy.

Almost all the projections incorporated into the May Budget now are being called into question.

Inflation was forecast to hit 2.5 per cent next financial year and stay there. Wages were expected to grow by 3.25 per cent and then jump to 3.5 per cent during the next three years.

So far, they have been stubbornly soft and there appears little chance those forecasts will be realised.

Slow wage growth does not look set to improve in the near future. ( ABC News: Nic MacBean )

While only a handful of commentators are game enough to call a looming recession, the consensus now is that growth will slow, with some economists conceding the Reserve Bank may be forced to cut interest rates.

The housing price slump in Sydney and Melbourne has yet to fully play out and many economists now expect peak to trough declines of up to 20 per cent.

Given household debt is at nosebleed levels, Australian households have been systematically working through their savings to maintain spending. At some point, that must come to an end. When it does, spending and consumption, the biggest driver of economic growth, will be impacted.

On the positive side, infrastructure spending could take up some of the slack, particularly employment, as the housing boom unwinds. But there have been suggestions that it too is beginning to taper off.

Add in a volatile global situation with trade wars, political and banking system instability within the European Union along with weakening conditions in China, next year is looking decidedly uncertain.

Which just goes to show; so much of the Budget is beyond the control of any Treasurer.