Global credit ratings agency Standard & Poor's says it has kept Australia's credit rating at AAA despite a blow out in the budget deficit.

The agency said today’s mid-year budget review update “has no immediate effect” on the nation’s credit rating.

“The government’s worsening forecast fiscal position, as outlined in its latest budget projections earlier today, further pressures the rating,” a statement from the agency said.

“We remain pessimistic about the government’s ability to close existing budget deficits and return a balanced budget by the year ending June 30, 2021.”

CPA Australia chief executive Alex Malley said he is frustrated by the ongoing obsession about surplus or deficit and maintaining the AAA rating.

With tax receipts down across board, Mr Malley said there is a clear message in the numbers.

"Our tax mix is not right," Mr Malley said.

"It's reasonable to question why the government capitulated so meekly on holistic tax reform earlier this year."

Treasurer Scott Morrison today gave his mid-year update, in which he said showed the federal government is getting spending under control despite low economic growth and falling company profits.

He maintained the government would return to surplus by 2021.

The update revised the nation’s deficit down $600 million – from $37.1 billion in 2016/17 as announced in May, to $36.5 billion.

While update shows a small improvement in this year's financial position, the bottom line worsens by just under $11 billion over the next three years

"There is more work to be done," Mr Morrison said following the release of the Mid-Year Economic and Fiscal Outlook (MYEFO) today.

Opposition treasury spokesman Chris Bowen warned it was “a wafer thin surplus that could be blown over by the slightest breeze”.

Greens leader Richard Di Natale echoed the sentiment and said, “by any measure, this is a government that has failed.”

Key changes announced to claw back savings include the axing of The Green Army program, established under Tony Abbott, which will slash $224.7 million over four years from 2016/17.

The Asset Recycling Fund will also be terminated, which is expected to reduce gross debt by $10 billion..

Mr Morrison said the government needed partners in parliament to support its savings efforts to restore the budget to balance.

Finance Minister Mathias Cormann agreed.

"We will continue to work with everyone in the Senate to complete the budget repair program but we have made significant progress, we are heading in the right direction," he said.

Mr Morrison said he didn't want to repeat Labor's mistake of forecasting budget surpluses and not achieving.

"These are the projected outcomes on the cash balance based on the information that is currently before us and the best assessments we can make of that," he said.

"On the best information we have able to us, the government's plan to return the budget to balance is projected to be in 2021 and that is something that says our plan remains on track."

Mr Morrison insisted that revenue, as a percentage of the economy, was higher than the long-run average.

"So I don't think it is a good plan to overtax the economy, undermine growth and, therefore, undermine the revenues that would come from that growth," he said.

He also insisted that spending had been brought under control.

The critical contribution since 2013 was a slowing in the rate of growth in expenditure, Mr Morrison said.

The update comes just weeks after the official data revealed that the nation’s economy had slumped 0.5 percent in the September quarter.

The next big test for the nation’s AAA rating will be May’s Budget.

KEY CHANGES ANNOUNCED IN MID-YEAR BUDGET UPDATE

CUTS

* $224.7 million over four years from 2016/17 axing Tony Abbott's Green Army.

* Abandoning Asset Recycling Fund, projected to reduce gross debt by $10 billion.

* Not proceeding with privatisation of the ASIC Registry, saving $4.5 million.

* Ditching the $154 million same-sex marriage plebiscite.

* $170.4 million over two years from 2016/17 by reducing the number of places in the nannies pilot from 3000 to 500.

SPENDING

* $35.8 million over four years from 2016/17 to increase staff for federal politicians.

* $8.1 million over four years from 2016/17 to provide a third staffed electorate office for electorates larger than 350,000 square kilometres.

* $3 million in 2016/17 to the Australian Transport Safety Bureau to finalise MH370 search operations.

* $100 million over four years from 2016/17 for Landcare, as part of Greens' deal on the backpacker tax.

* $22.1 million in 2018/19 to secure the filming of Aquaman on the Gold Coast in 2017.

* $12 million over two years from 2017/18 for new wifi and mobile coverage on NSW Central Coast trains.

* $20.1 million over four years from 2016/17 to increase capabilities of Fair Work Ombudsman in helping vulnerable migrant workers.

* $39.0 million over four years from 2016/17 to support the investigation of matters arising from the trade union royal commission.

* $5.1 million over two years from 2016/17 to continue the operation of the interim embassy in Kyiv, Ukraine.

* $18.4 million in 2016/17 to establish a taskforce to plan for Australia hosting the ASEAN leaders' summit in 2018.

* $1.6 million over two years from 2016/17 for a black economy taskforce.

* $25.6 million over six years from 2016/17 to relocate the Australian Pesticides and Veterinary Medicines Authority from Canberra to Armidale, New South Wales.