Federal Government given budget boost as deficit falls

The federal government's chances of posting a budget surplus have received a significant boost after new figures revealed the deficit fell by almost 50 per cent in just a quarter.

Australia's budget bottom line is more than $9 billion better than was forecast in the May budget, falling to $10.5 billion.

The budget forecast a deficit of $7.4 billion by the end of the current financial year.

The new figures show there was a surge in the levels of tax receipts, with taxes received up almost $6.5 billion to $98 billion.

Company taxes hit $6.3 billion by September, a stark rise from the $3.8 billion at the same stage last year.