The Albanese government has recorded a smaller-than-expected budget deficit, but the opposition says Labor cannot claim credit for the improvement.

Treasurer Jim Chalmers and Finance Minister Katy Gallagher revealed on Monday that the predicted $27.9 billion budget deficit will be just $10 billion.

However, Liberal Senator Jane Hume told Sky News the government was “spinning” a deficit into good news.

“If you can spin a positive spin on a deficit, well, I've got a bit of swampland that I'd like to sell you,” she said.

“A deficit at a time when we have full employment, when we have increasing inflation, this is simply bracket creep. It's bracket creep and high commodity prices.

“And now they're saying a (lower) deficit is good news? Well, give me a break. This is a government that has

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