Predicting the jobless rate will drop to 4.5% by mid-2013 as 500,000 new jobs are created, the government outlined a range of measures to boost training programs, entice the long-term unemployed and others back into the work force and draw 16,000 skilled migrants into areas with jobs to fill.

Canberra's policy measures are in stark contrast with those of other developed economies, where high unemployment and surging debt levels are more typical.

Australia plans a total of 22 billion Australian dollars ($23.54 billion) in savings over four years to help return to a budget surplus in 2012-13 of A$3.5 billion, or 0.2% of GDP, compared with a record deficit of A$54.8 billion in 2010. The deficit for the fiscal year beginning July 1 is projected at A$22.6 billion.

Net debt is projected to peak at a mere 7.2% of national output, underscoring the country's already gilt-edged AAA credit rating. The government has pledged to maintain a liquid bond market, though the nation's bounty of riches is such that it likely won't have a need to borrow.

Telling reporters that Australia's budget position is "the envy of the developed world," Treasurer Wayne Swan described what he calls the "Asia century" and highlighted that Australia will beat economic powerhouses such as Germany in reaching surplus.

Standard & Poor's analyst Kyran Curry said the government's surplus plans were achievable and consistent with its AAA rating, though he flagged some concerns that the revenue impact of a planned carbon-pricing plan wasn't included in the budget. Moody's analyst Steven Hess said the fiscal outlook shores up the country's fiscal position. "Australia is a strong AAA-rated sovereign," he said.

Some market economists said the government could have done more to offset capacity constraints by implementing tougher savings. "The issue is, with the strongest terms of trade in 140 years, why are the savings in the budget not greater? That is a glaring issue," said Stephen Roberts, chief economist at Nomura.

Balancing the budget is a political imperative for Prime Minister Julia Gillard's minority Labor government. Hitting that target while delivering on the spending demands of the minority lawmakers who prop up her administration has become more fraught since record flooding hit coal-rich Queensland in January and a powerful Australian dollar—trading near 29-year highs against its U.S. counterpart—began bringing suffering to the manufacturing and tourism sectors.

Also key to the surplus plans is projected revenue in the mining sector, where demand from emerging Asian economies such as China means prices for commodities such as iron ore and coal are trading at historic highs. Investments in the mining sector alone in the fiscal year beginning July 1 are projected at A$70 billion.

Australia, which hasn't experienced a technical recession in 20 years, is enjoying a mining boom "never before seen in its history," which makes dealing with the labor shortage urgent, Treasurer Swan said. "We don't have a single person to waste," he said.

But risks abound. Managing the boom is a critical task for Ms. Gillard's administration; inflation is projected to rise, prompting the central bank to warn of higher interest rates ahead. The international outlook is also far from certain. Much of Australia's fortune is linked to the commodities boom, and policy makers are wary of events in the Middle East, Europe's continuing debt crisis and the risks of another shock such as Japan's massive earthquake.

"There are still risks to the downside, and that is another reason we are returning to surplus," Mr. Swan said.

The government has little political wriggle room. Much of the budget will need approval from the Greens party, which Ms. Gillard depends on for support in the lower house and in the Senate. The prime minister also needs backing from the nonparty lawmakers, drawn from rural Australia, who hold the balance of power in the lower house.

Bob Brown, leader of the Greens party, welcomed increased spending on mental health but said his party will seek to change some aspects of the budget—without blocking supply of money bills. Tony Windsor, one of the rural nonparty lawmakers propping up the Gillard government, said the budget is a positive for his constituents.

Industry reaction was more mixed. Heather Ridout, chief executive of the Australian Industry Group, said the government did little to alleviate sectors being hurt by the strong exchange rate and missing out on the mining boom.

"While the economy is forecast to grow strongly at the aggregate level, this is masking widespread weakness and uncertainty across major sectors and giving rise to a lopsided economy," Ms. Ridout said.

Among the other major policy measures announced in the budget, the government plans new tax measures and better transparency to boost private-sector funding of major infrastructure works.