Cost-of-living relief will be handed down in the federal budget but the spend will not add pressure to inflation or hurt Australians in the long-run, the treasurer says.

Jim Chalmers will hand down his third budget on Tuesday, which will show a $9.3 billion surplus for the 2023/24 financial year.

It’s the first time the country’s finances will be in the black for consecutive years for almost two decades and marks a $10.5 billion improvement on forecasts made in December’s mid-year update which showed a deficit of $1.1 billion.

Extra cost-of-living help wouldn’t add to inflation but rather put downward pressure on it, Dr Chalmers said. 

“We’ll do that by showing spending restraint … and also by making sure that we design our cost of living so that it’s part of the solution to this inflation challenge rather than part of the problem,” he told reporters in Canberra on Tuesday. 

The biggest driver of the second surplus was a strong labour market as opposed to purely increased commodity prices, Dr Chalmers said. 

Banking all the added revenue was a responsible decision made by the government to not add to inflation, he said. 

But his opposition counterpart criticised the government for failing to tame inflation in its first two budgets, 

“The cost-of-living crisis continues to rage,” shadow treasurer Angus Taylor told reporters in Canberra.

Despite the two surpluses, the government needed to focus on a better structure for the budget rather than spruiking the extra money from windfalls, Mr Taylor said. 

“It needs to set us up for longer-term growth, which is small business private sector driven, not driven by the government.” 

Mr Taylor pointed to $45 billion of spending the coalition opposed, including the National Reconstruction Fund, a housing fund and advertising for the tax cuts.

“This is not what you do to beat a cost of living crisis,” he said. 

The budget didn’t go far enough in assisting struggling Australians, Greens treasury spokesman Nick McKim said.

“Rents are going through the roof. Food is unaffordable,” he said.

“We’re going to see Labor prioritising the surplus and its own political self-interest over direct, meaningful assistance to people who are getting smashed by cost-of-living in our country.”

Budget papers will show the budget will be more than $200 billion better off over the six years to 2027/28, compared to forecasts made before the last federal election.

Inflation is set to drop to 2.75 per cent by December, according to the budget papers, a year earlier than the Reserve Bank predicted it would fall back within its target band of two-to-three per cent.

The centrepiece of cost-of-living measures will be $107 billion worth of changes to stage-three tax cuts that are due to kick in from July.

By Dominic Giannini and Andrew Brown in Canberra