Budget deficit comes in at $39.6b

The federal government is claiming a win with the final budget deficit for 2015-16 coming in $340 million less than forecast.

The underlying cash deficit was $39.6 billion, or 2.4 per cent of gross domestic product.

Treasurer Scott Morrison attributed the improvement to $1.6 billion less in expenditure that was partially offset by $1.1 billion in lower-than-expected receipts.

Government sector net debt was $296.4 billion - $10.7 billion higher than estimated in the May budget.

The final result was due to lower interest rates increasing market value of Commonwealth Government Securities.

The fiscal balance was $2 billion better than expected, with expenses $2.8 billion lower and net capital investment $526 million lower.

That was offset by $1.3 billion less in revenue.