Global ratings agency Fitch says the federal budget is based on "optimistic" assumptions about future revenue growth and warns it sees risks to the government's pledge of an early return to surplus.
Fitch says the budget delivered by Treasurer Scott Morrison on Tuesday relies on optimistic revenue assumptions, rather than new policies, to help deliver a $2.2 billion budget surplus in 2019/2020 - a year ahead of schedule.
The agency recently affirmed its AAA rating and stable outlook on the Australian economy, but on Wednesday said the revenue assumptions - along with lower tax revenue from large personal income tax cuts announced in the budget - add to uncertainty about the budget being in surplus in 2020/21.
Fitch associate director Jeremy Zook said the budget maintains a path to cutting Australia's budget deficit and government expenditure remained under control.
Fitch has maintained its expectation that the nation's gross debt ratio - which measures debt as a proportion of GDP - will start to decline from next financial year.
"At the same time, however, the budget is based on optimistic revenue assumptions," Mr Zook said in a statement.
"The reliance on improved revenues, rather than policy proposals, to narrow the deficit poses some downside risk to the achievement of the government's surplus target."
Other ratings agencies have expressed similar concerns about the budget, which assumes a significant uptick in growth in wages and the economy over the next two years, and is buoyed in the short term by a surge in commodity prices that has boosted company tax receipts.
Ratings agency Moody's gave a cautious welcome to the better than expected move along the path to budget repair but expressed concern on some of the budget's underlying assumptions.
"A risk remains that the expectations for commodity prices are optimistic and uncertainty persists on whether wages growth will pick up significantly enough to support revenues," Moody's Vice President Martin Petch said.
Ratings agency S&P Global Ratings rated the budget as an improvement over the past year, aided by strength in the Australian and global economies, but has kept the outlook on Australia's credit rating negative to reflect global trade uncertainties.
