Can we escape the curse of the unlucky '7'?

The world has just two months left on the clock to see if it can finally vanquish the decennial curse of the "7".

This year has brought with it no shortage of challenges. The inauguration of Donald Trump and his populist and anti-trade rhetoric. The fallout from the disastrous Brexit vote. China's rapid credit acceleration. North Korea's missile threats.

At home, record low interest rates have fuelled a housing debt binge, national energy supply remains in disarray and politics has been dominated by a distressing debate about the right to love.

Still, for all its pettiness - punctuated by periodic existential threat - 2017 is shaping up as a turning point for the Australian economy.

Our economic mandarins at Treasury and the Reserve Bank have started cautiously welcoming signs that the worst has past. Reserve Bank governor Philip Lowe says it's time to turn a new page. Treasury is increasingly confident that the drag from the end of the mining boom on living standards is behind us.

Treasurer Scott Morrison's budget night mantra of "better days ahead" rings truer every month. After a decade of surplus slippage and spiralling debt, Australia's budget finally looks set to beat expectations in a mid-year economic update due before Christmas.

Budget-watching veteran and director at Deloitte Access Economics, Chris Richardson, will on Monday release his latest quarterly business outlook with the theme: "The clouds continue to clear."

According to Richardson, a broad-based global recovery bodes well for Australian jobs, incomes and the public purse.

But Richardson is clear who should get the credit. And it's not Australian politicians: "Australia's fiscal fortunes depend more on China than they do on Canberra and the state capitals."

Taking all state, territory and federal governments together, Richardson predicts government spending as a share of the economy is set to shrink from about 34 per cent in the immediate aftermath of the GFC to 32 per cent by the end of this decade. Meanwhile, government revenues will recover from below 28 per cent to around 31 per cent, bringing government budgets within coo-ee of balance by 2020-21 - but still short.

The federal budget is getting a boost from higher company profits and stronger jobs growth fuelling personal income tax collections. At a state level, housing booms have boosted stamp duty, while low interest rates have supported household spending, supporting GST revenues.

"That's the happiest backdrop for collecting taxes that the economy has provided since 2011-12," Richardson observes.

While Morrison recently trumpeted a $4.4 billion improvement in last financial year's budget bottom line (compared with the most recent prior estimates given in May) Richardson observes this was largely due to a corporate revenue gift from China and spending undershoots on several government programs, including the delayed rollout of the National Disability Insurance Scheme.

Still, Richardson has this early Christmas present for a beleaguered Turnbull government: "The timing of that improvement may provide the Feds with just enough wriggle room to spend it on tax cuts in the lead-up to the next election. Let's see."

But it's too early to pop the economic champagne corks.

Revenue gains fuelled by China could prove ephemeral, warns Richardson: "Don't forget that China has remained dependent on cheap credit to goose its growth ... we doubt the sustainability of that. And we doubt its wisdom as well. The authorities have been pumping faster than a Hollywood Botox clinic via increased credit, and they're aware of the risks and vulnerabilities wrapped up in the rising levels of leverage in the Middle Kingdom."

And spending restraint will be tested as the NDIS rolls out in coming years. Budget documents presently assume any cost over-runs will be offset by reduced spending in other areas, and "that's a pretty strong assumption", says Richardson.

"In effect, it's an assumption that the gravitational pull of populism will fade, and that the nation will become more 'governable' than it has been in quite some time."

For all the apparent success Australia has had in navigating the past decade of tricky economic waters, it is clear we have not emerged unscathed.

"The battle against spending is still well and truly being lost," says Richardson. "And, to be clear, the overall tax take will also have to go up to help towards budget repair." Already, ordinary income earners are being forced to shoulder a bigger burden of budget repair through higher income taxes.

Even taking into account the recent improvement, Richardson warns of lingering deficits across all levels of government until well into the next decade.

"Those deficits are structural, and it will take both courage and compromise to have any hope of tackling them effectively."

Australia's thin budget buffers leave us more exposed to any future economic shocks that should wash up on our shores.

Today, the federal government debt sits above $500 billion - although it is expected to peak next financial year.

As the Parliamentary Budget Office noted last week, Australia's net debt of approaching 20 per cent of GDP is modest by international standards. But those international standards include Greece and Italy.

The PBO too, urges the need for "continued vigilance" on government spending, with rapid growth in spending on the NDIS, childcare support and aged care support.

So, as 2017 draws to a close, Australia looks set to close out the year in better shape than we started.

But it's clear we will wear the scars of this decade of economic and policy turmoil for many years to come.