A substantial turnaround in the nation's finances will help the government better fund health, disability and defence programs, the finance minister says.

A stronger jobs market and higher than expected tax revenue has left the federal budget $18 billion better off.

The final budget outcome to be released on Monday is set to show a deficit of just under $10 billion for 2024/25, an improvement on the government's original forecast of $28 billion in the red.

Finance Minister Katy Gallagher said the change was "good news" because it would help pay down the nation's debt and fund critical initiatives.

"It means the budget's in a better position so that we are able to invest in all of those programs that matter to people," she told Nine's Today program on Monday.

"Like our Medicare, increa

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