Treasurer Scott Morrison has dismissed rating agency pessimism about the Government’s ability to achieve its narrow surplus in 2021. Picture: Gary Ramage

The prime minister says the challenge for incumbent politicians to fix the budget is a moral one, and not to leave it for their children and grandchildren.

“This moral issue of living within our means is absolutely paramount because we cannot keep on building up this mountain of debt to throw onto the shoulders of those for whom we should care the most,” he said.

Treasurer Scott Morrison expected to keep the AAA rating after yesterday’s budget update but said no one should be under any illusions about the economic challenges Australia faces.

All three major ratings agencies affirmed Australia’s prized triple-A rating after the budget review was released on Monday.

Prime Minister Malcolm Turnbull says passing measures to keep the budget in check is a ‘moral’ issue. Picture: AAPSource:AAP

S & P Global Ratings remained “pessimistic” about the government’s ability to reach even the narrow surplus of $1.1 billion forecast for 2021 however, while Moody’s noted meeting fiscal targets “will be difficult in an environment of weaker nominal GDP growth”.

The Treasurer dismissed those concerns today but said they underscored the need for economic policies that supported jobs and businesses.

But he didn’t want a recession as a wake-up call to Australians that the status quo could not continue.

“I have heard people say that and people say that they wish for a burning platform to do X, Y and Z,” Mr Morrison told Nine’s Today show.

“Well, on a burning platform people get burnt and I don’t wish that on the Australian economy or anyone.

“I think it is important that we clear any fog of unreality about the challenges that we face.”

Treasurer Scott Morrison says the Government must be clear about the economic challenges Australia faces. Picture: Gary RamageSource:News Corp Australia

Mr Morrison said the government needed partners in Parliament who were “prepared not to borrow from our children to pay for today’s welfare benefits”.

“Effectively that is what the Parliament is still enforcing on us,” he said.

“We still have $13.2 billion in saving measures, $12.5 billion of that on payment savings, particularly in the welfare area.

“The Parliament, particularly the Labor Party is saying we want small businesses to pay more tax because they want a bigger welfare system and we don’t agree with.”

The Treasurer also defended the extra $35.8 million in the budget for an extra 33 government staffers for MPs.

Mr Morrison said the funds, to employ staffers over the next four years, would particularly go to crossbenchers.

“That is to try and ensure that the Parliament can get through the enormous volume of work in trying to get these measures through,” Mr Morrison said.

The budget update shows a small improvement in this year’s financial position from a deficit of $37.1 billion at the time of the May budget to $36.5 billion. However, over the next three years the bottom line worsens by just under $11 billion.

By 2019/20 the deficit will still be $10 billion and modest surpluses are predicted beyond that.

Mr Morrison is clinging hard to the government’s plan to offer business tax cuts, starting with the smaller firms.

But Labor still isn’t keen on what it describes as a $50 billion “ram raid on the budget”.

The Treasurer wouldn’t explicitly say whether he has spoken with his Labor counterpart to see if the Opposition is open to negotiations on the tax cut.

“We continue to engage with everyone right across the parliament,” he said.