Treasurer Josh Frydenberg will stand by the Morrison government's promise of a budget surplus in his mid-year update of the nation's finances even as the drought and spending-averse consumers hit the economy and cut federal revenue.

Mr Frydenberg on Monday will use the mid-year economic and fiscal outlook to confirm the government remains on track to deliver a surplus in 2019-20 - the first surplus in 11 years - despite a hit to company tax and lower GST which will leave the states and territories worse off.

The budget, released in April, forecast a surplus this financial year of $7.1 billion to be followed by an $11 billion surplus the following year. It was predicated on the economy expanding by 2.75 per cent, wages growing at the same rate and a 5 per cent unemployment rate.

At the time, the Reserve Bank had not cut interest rates although the government was expecting its expanded low and middle income tax offset to help deliver a boost to households which were forecast to lift their spending.