Surplus delayed ... Treasurer Joe Hockey. Picture: Stefan Postles/Getty Images Source: Getty Images

The Treasurer will hand down the mid year economic outlook next Monday.

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Ahead of the release, Mr Hockey has admitted to Sky News that it now won’t be possible to return the budget to surplus in 2018.

That’s “because fundamentally we want to keep the economy going, we want to keep it strong,” he said.

“There have been good signs this year that the economy is strengthening — we want to keep that momentum going”.

The further delay comes alongside a deeper deficit than had been previously foreshadowed.

“We’ve faced some significant headwinds this year,” he said, noting falling commodity prices.

Mr Hockey confirmed he will have to unveil savings next week to account for the changing circumstances.

“There will be savings, there has to be savings,” he said — but stressed they would be “modest” and have no “negative impact” on the economy.

He refused to speculate whether they will target the foreign aid budget.

Despite not yet passing the Senate, he confirmed new university reforms will be counted in the update.

“We are determined to get through our changes,” Mr Hockey said.

The Treasurer insisted the Australian economy is “fundamentally strong”.

The comments have been interpreted as pointing to further cuts in foreign aid spending, but no new tax measures.

The treasurer said the projected surplus for 2018/19 would not be achieved because “we want to keep the economy going”.

Mr Hockey said the government had been creating jobs at three times the speed of last year, without which the unemployment figure would have a seven in front of it.

Despite low business and consumer confidence, the treasurer said the economy would get a boost from new infrastructure projects, high demand for exports and strong housing construction.

“There’s no doubt the Australia economy has a good trajectory (but) we’ve got to do more,” he said.

The MYEFO papers would include budget measures that have yet to pass parliament.

Mr Hockey said that next year the government would hold a “conversation” with the Australian public on tax reform, federal-state relations and other issues to meet the challenges of coming decades.

Focus on broken promises ... Opposition Leader Bill Shorten. Source: News Corp Australia

Spin is not the problem: Shorten

Opposition Leader Bill Shorten seized on Mr Hockey’s admission the government could have done more “marketing” on its budget.

“Families are suffering from cuts of $6,000 to their budget, millions of sick Australians are being forced to pay a GP Tax, students face $100,000 degrees and every motorist is paying more in petrol tax - and Joe Hockey is worried about marketing?

“This explains the Government’s plans for a big expensive advertising campaign on their new GP Tax and their $100,000 degrees.”

The Opposition Leader said “it’s not the spin that’s the problem ... it’s [the] broken promises and ... unfair Budget.”

“No amount of slick marketing will convince Australians that this Budget is fair or delivering on the promises Tony Abbott made at the last election.”

Slamming Mr Hockey’s performance ... Shadow Treasurer Chris Bowen. Source: News Corp Australia

MYEFO will be ‘full of excuses’: Bowen

Shadow treasurer Chris Bowen said the MYEFO would be a document “full of excuses, full of blame-shifting and full of pathetic reasons why he (Hockey) has lost control of the budget”.

“He told us that it would be a government of no excuses and no surprises, and of course we have the opposite,” he said.

Mr Bowen said MYEFO should not reflect measures that had no chance of passing parliament and its figures should be independently tested by the Parliamentary Budget Office.

The government has foregone about $8 billion over five years in spending cuts as a result of negotiations to get budget measures through the Senate.

Tighter checks on disability pensions and other welfare payments are also expected in the midyear review.