Australia government promises \'back in black\' budget in election run-up

Twenty-seven years and counting, Australia's unbroken run of growth has been envied the world over.

Even so, the RBA kept rates on hold on Tuesday.

Recent data has disappointed - the central bank also dropped a 3 per cent growth forecast for this year.

The government, meanwhile, was announcing its own budgetary measures to keep the economy on track.

(SOUNDBITE) (English) AUSTRALIAN TREASURER JOSH FRYDENBERG SAYING: "So tonight I am pleased to announce a budget surplus of $7.1 billion." A surplus that allows, it says, a pledge of 158 billion Aussie dollars of proposed tax cuts over the next decade.

That's 112 billion US dollars - mostly for middle-income earners - and on top of a similarly sized pledge last year.

Prime minister Scott Morrison's conservative coalition is expected to suffer a wounding defeat in an election in May.

What one analyst described as an "extraordinarily generous" giveaway to voters, an attempt to rewrite that narrative .... If with a nod to external challenges too.

(SOUNDBITE) (English) AUSTRALIAN TREASURER JOSH FRYDENBERG SAYING: "Businesses are also benefiting from the free-trade agreements this government has secured.

China, Japan, Korea, the Trans-Pacific Partnership and now Indonesia.

Tonight we provide an additional $60 million for export market development grants to allow small and medium-size businesses to capitalise on these opportunities." Even with record spending on health and education, the government says the budget will show a surplus - for the first time in 12 years.

But - its forecasts also downgrade growth .... And as for the Aussie dollar: the RBA's decision shaved off half a per cent on Tuesday.

Rates have been stuck at 1.5 percent since mid-2016.

Some even see a shift to an easing bias when it next meets - also in May.