Treasurer Josh Frydenberg isn't showing too much concern about the slump in the iron price in recent weeks, saying it is still above where Treasury predicted it would be when putting together the April budget.
The iron ore price has skidded from around $US120 per tonne in early July to under $US88 on Friday and its lowest level since the beginning of the year, as investors become increasingly concerned about economic growth in China, a major importer of Australian iron ore.
Mr Frydenberg said iron ore was forecast to be $US55 in the budget.
"We've always been conservative with our budget forecasts when it comes to the iron ore price, our largest single export commodity," he told reporters in Melbourne on Saturday.
He said when the price was $US120 it was obviously producing more revenue for companies, as well for state and federal governments.
"We haven't alway expected that revenue to continue to flow with those elevated prices ... any prices that are elevated to the point as they have been in recent times is a bonus," he said.
Earlier this month, Mr Frydenberg told parliament he was was confident the budget position for the past financial year will be be better than his forecast he made in April.
In April he forecast a deficit of $4.2 billion in the 2018/19 financial year, before reaching a surplus of $7.1 billion budget in 2019/20, the first time the budget will be in the black for over a decade.
The final budget outcome for 2018/19 financial year is due in September.
Australian Associated Press