Mr Hockey highlighted ''green shoots'' in Australia's economy, including the creation of 106,000 new jobs and economic growth of 3.5 per cent, which is higher than the vaunted "trend growth" figure of 3.25 per cent.

But in question time, opposition leader Bill Shorten used the economic good news to press the government on its tough budget cuts.

''Can [Mr Hockey] explain why his government's ugly budget is putting a new tax on petrol, putting a new tax on going to the doctor, hurting pensioners and veterans, hurting families [and] cutting $80 billion from schools and hospitals?'' Mr Shorten asked.

Mr Hockey hit back at Labor's political attack, arguing the former government had left a legacy of debt and stringent measures in the budget were necessary.

''We needed a budget at this time that demonstrated to the community that we were prepared to take the tough decisions and to get our economy on the straight and narrow once again,'' he said.

New Bureau of Statistics figures showed the economy grew by 1.1 per cent in the first three months of this year after a big jump in mining exports.

The mining sector was

responsible for 80 per cent of that growth as export volumes surged at their fastest rate in 13½⁄ years.

Economists were caught off guard by the pace of export growth, saying the mining boom had now shifted from its investment phase to its production and export phase.

But others warned the unemployment rate could still creep higher because the production phase of the mining boom will not be labour intensive.

''The economy is weathering the end of the mining investment boom well … [but] growth will not be sustained at this pace for the next few quarters,'' Shane Oliver, Chief Economist, AMP Capital.

''It's too early to break out the champagne.''

Mr Hockey also said he would not revise his expectations for the unemployment rate to creep higher than 5.8 per cent.

But he said the positive GDP figure, coupled with strong growth in employment in recent months, showed the Abbott government's controversial decisions on car manufacturing, SPC Ardmona, and Qantas had not damaged the economy.

A breakdown of the ABS data showed NSW was the best performing state once net exports were taken out of the equation.

Western Australia and Queensland detracted from national economic growth once net exports were removed.

NSW private investment grew 9.3 per cent in the March quarter, with public investment (3.2 per cent) and government spending (1.2 per cent) growing strongly.

The NSW government seized on the data.

''Our housing approval figures are the highest they've been in over a decade, we're leading the nation on retail sales growth, and we have the second lowest unemployment rate in the nation,'' NSW Treasurer Andrew Constance said.

''These are encouraging signs for the NSW economy at a time when the economy is transitioning from mining to non-mining drivers of growth.''

St George senior economist Jo Horton said NSW would expect to be a beneficiary of greater investment as the economy transitioned towards the non-mining sector.

''For NSW, low interest rates are the driving factor,'' Ms Horton said.

''We have seen residential construction growing in NSW because low interest rates tend to have a larger impact here than in other states because house prices are higher and people generally have larger mortgages on average.''