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No retreat from our promises: Morrison

AAP logoAAP 18/12/2016

Treasurer Scott Morrison warns Australia is at risk of being stranded if parliament doesn't pass the coalition's proposed company tax cuts, amid speculation the timetable for a budget surplus will be pushed out.

Ratings agencies will be watching closely on Monday as the government releases its mid-year budget review, with senior ministers refusing to say whether the budget is still forecast to return to surplus in 2020/21.

Economists believe there's a 50/50 risk of the nation losing its triple-A rating if the surplus is once again delayed.

Mr Morrison says any downgrade is a matter for the ratings agencies, insisting the mini-budget will be a "careful" document.

Treasury's forecasts cautiously reflected fluctuations in commodity prices as well as the September quarter's weak economic growth, he said.

Investors would take into account Australia's 25 years of consecutive economic growth.

"Our economic growth is still in the top of the pack when it comes to advanced economies around the world," he told reporters in Canberra.

The government was working to curb the growth in spending but it needed the support of parliament.

"We're looking for the partners in this parliament who will join us on the task of returning the budget to balance."

Mr Morrison said the government would not be shelving any of its election commitments, insisting company tax cuts - mostly opposed by Labor - were crucial to driving investment.

"The Trump Administration is planning to take the company tax rate to 15 per cent -that would be half what Australia's corporate tax rate is.

"If you leave that situation in place, and you're unable to get the support of the parliament for that, then the parliament leaves the Australian economy at the risk of being stranded."

Economist Chris Richardson, from Deloitte Access Economics, expects the deficit to blow out to $40 billion and doubts the budget can return to surplus by 2020/21.

"You won't get a surplus in Australia on existing policies," he told the ABC.

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