Government finances are in better shape than expected despite massive spending during the pandemic to support households and businesses.

Treasurer Jim Chalmers and Finance Minister Katy Gallagher handed down the final budget outcome for 2021-22 on Wednesday, posting an underlying deficit of $32 billion.

This was about $50 billion less than the $79.8 billion deficit that was originally forecast for the year and follows a $134.2 billion shortfall in 2020-21.

In 2019-20, the deficit was $85.3 billion.

The Treasurer said the government’s healthier-than-expected bottom line was largely due to high commodity prices.

The government brought in $27.7 billion more than expected due to strong commodity prices and more income tax due to low unemployment.

Outgoings were also $20.1 billion lower than predicted.

“This was due to delays in the contracting of COVID spending, temporarily lower-than-expected demand for some health and NDIS services, and the impact of supply chain disruptions and capacity constraints on road and rail infrastructure projects and other spending,” the budget outcome papers said.

Although Dr Chalmers welcomed the “temporary improvement” in the budget bottom line, he said the budget was still under pressure.

He says the government has five major growing areas of spending in the budget: Health, the NDIS, aged care, defence and the cost of servicing government debt.

As such, his first budget on October 25 will stick to the basics with some limited cost-of-living relief.

“We will provide cost-of-living relief in the budget that is responsible, not counter-productive, in areas like cheaper child care,” he said in Parliament on Tuesday.

Shadow finance minister Jane Hume said the government did not have a plan to address cost of living pain felt by households.

“Budgets are all about priorities, and this government’s priorities seem to be askew,” Senator Hume told Sky News.

“Australians want to talk about the cost of living, whereas the Labor government seems to want to talk about their agenda.”

– AAP