Treasurer Cameron Dick slashed the forecast deficit of $3.48 billion to $1.49 billion in 2021/22 his mid-year budget update on Tuesday.

The deficit will be progressively trimmed until there’s a $156 million surplus in 2024/25.

“This is less than a 10th of the budget deficits in both NSW and Victoria,” the treasurer told reporters on Thursday.

“Our deficit of just under $1.5 billion is a reduction of around $2 billion from the $3.5 billion in June this year.

“That means our budget deficit is forecast to be less than half the budget deficit before.

“That deficit reduction is driven by to two revenue sources, first an increase in coal prices, and second an increase in stamp duty flowing from a larger volume of residential transactions and higher property values.”

Mr Dick said the main driver is revenue from mining royalities, taxes, GST receipts and property sales will be $68.2 billion in 2021/22, $7.7 billion more than forecast.

The coal royalty growth of $2.9 billion to $6.2 billion comes despite China’s recent embargoes on Australian coal due to rising international prices for hard coking coal used in steelmaking.

The review said premium coking prices have risen to as high as $US408 during the last quarter as China dipped into other markets constraining supples, mine accidents halting coal expansion within China and Covid-19 force shutdowns Chinese supplies such as Mongolia.

The government is also forecasting better economic growth of 4.25 per cent in 2021/22, compared to the 3.0 per cent forecast six months ago.

Jobs are also expected to grow by 4.5 per cent the current financial year and 2.5 per cent in 2022/23.

Total debt is now forecast to hit 105 billion in 2021/22, up from the $95.8 billion predicted just six months ago.

Debt will reach $126 billion in 2024/25, down from the $127.3 billion predicted in the last budget.

Another $600 million will be spent on Queensland’s Covid-19 response in the current financial year.