Colin Brinsden, AAP Economics Correspondent
(Australian Associated Press)

The return to a federal budget surplus could occur more quickly than predicted in May after monthly government figures showed a deficit nearly $6 billion smaller than forecast.

As of May, the underlying budget deficit was running at $10 billion, $5.8 billion lower after 11 months of the 2017/18 financial year than expected.

This was the result of receipts being $3.2 billion higher and payments being $2.7 billion smaller.

The May budget forecast a deficit of $18.2 billion for the full 2017/18 financial year.

A deficit of $14.5 billion was predicted for 2018/19 and then a small surplus of $2.2 billion in 2019/20, which would mark the first time the budget has been in the black since 2007/2008.