Treasurer Scott Morrison is predicting strong wages growth, a slight improvement in the jobless rate and is sticking to an elusive budget surplus in 2021.
His second budget sees a big spend-up in infrastructure and education, a housing affordability package and further assistance for small businesses while cracking down on dole bludgers.
The $13 billion in so-called "zombie" measures from Joe Hockey's ill-fated 2014 budget - stymied by the Senate - have finally been dumped.
But to pay for that, Tuesday's budget does include a lift in the Medicare levy in two year's times while big banks get hit with a new levy and other new measures after years of offering dodgy advice to some of their customers.
Mr Morrison says he could have allowed the budget to blow out.
"We have acted to keep the balanced budget on track fairly and responsibly," he told ABC television.
Global rating agency Moody's Investors Service was quick to give the budget the thumbs up, even though it anticipates a slower path to a surplus and a slower rate of growth than predicted by the Australian Treasury.
"Taking the budget and our forecasts into account, we assess Australia's fiscal strength as very high, one key support to the government's Aaa rating and stable outlook," Moody's associate managing director Marie Diron said in a statement.
She also saw government debt as in line with other triple-A ratings.
However, government debt does blow out to over $600 billion by 2020/21 and has forced the treasurer to issue a new directive that lifts the credit limit from $500 billion.
Shadow treasurer Chris Bowen was unsurprisingly unimpressed by the overall budget.
"They have tried to catch up with Labor. I accept that. But they have failed miserably," he told ABC television.
Australian Chamber of Commerce and Industry head James Pearson said the budget shows the difficulty the government is facing getting spending under control.
"We are pleased to see action to achieve a surplus by 2020/21, but are concerned that most of the improvement to the bottom line comes from more taxes rather than less spending," Mr Pearson said.
The economy is on course to complete a world record 26 years of uninterrupted economic growth in the next few months and, once it overcomes the impact of Cyclone Debbie, should be travelling at a rate of 2.75 per cent in 2017/18 before accelerating to three per cent until at least 2020/21.
If that happens budget deficits shrink from $37.6 billion this year to near balance in 2019/20 and a $7.4 billion surplus the year after, which will be the first surplus in 13 years.
"There is clearly the potential for better days ahead," Mr Morrison told parliament.
The jobless rate will ease only slightly over that time towards five per cent, while inflation will be contained in the Reserve Bank's two to three per cent target band.
Wage growth is projected to accelerate to 3.75 per cent by the end of the four-year budget estimates, almost double the rate now.
