Treasurer Josh Frydenberg says a fall in the number of people receiving JobKeeper wage subsidies is a sign of momentum in the economy.
The number of workers whose wages were being subsidised by the program dropped from 3.6 million in September to 1.5 million in October.
"We're seeing strong momentum in the economic recovery and the JobKeeper numbers for the month of October are better than what we forecast at Budget," Mr Frydenberg said.
"Certainly, things are trending in the right direction."
JobKeeper requires businesses to show a 30 per cent reduction in turnover compared to before the pandemic.
Some 450,000 fewer businesses qualified for JobKeeper in October compared to September.
The 2020-21 Budget assumed there would be 2.2 million recipients for the December quarter, but the actual figure is likely to be some 700,000 people lower.
Australia not an economic island
Mr Frydenberg said Australia would still face economic difficulties in the months ahead as other countries went through their second and third coronavirus waves.
"That's going to affect Australia as well, because they're our export markets," he said.
"We may be an island geographically but we're certainly not an island when it comes to the economy, so let's just wait and see what happens into the new year."
The JobKeeper scheme was estimated to cost $101.3 billion over the Budget's forward estimates, but, based on the new figures, its final cost is likely to be lower.
Payments totalled nearly $70 billion to September 27.
Labor's Treasury spokesperson Jim Chalmers said people were still hurting and it was not time to celebrate yet.
"What looks like a recovery on paper will still feel like a recession for many Australians," he said.
"The Morrison Government and Josh Frydenberg shouldn't be congratulating themselves while unemployment queues are still lengthening."
He said Australia still had a "substantial problem" with underemployment.
The ABS reported unemployment was 7 per cent in October, and underemployment was 10.4 per cent.
