Treasurer Scott Morrison insists anything the Turnbull government does in cutting taxes won't put at risk returning the budget to surplus in 2021.
Reserve Bank governor Philip Lowe told parliamentarians on Friday if the government pursued lower corporate tax rates, it would be a big mistake to do that on the back of higher budget deficits.
"The prime minister and I have both said anything we do on the tax front is not being done to prejudice or put at risk that 2021 projection," Mr Morrison told ABC television on Sunday.
"So we know that rule. We've been sticking to it and that's why we've been keeping the triple-A credit rating."
He said the surplus projection had been in the past five budget and mid-year budget statements.
The treasurer has praised the US Trump administration for cutting its business taxes, but he says unlike the US, Australia was pursuing corporate tax reductions within the "budget envelope".
The US reduced its corporate tax rate from 35 per to 20 per cent which will push the US budget deficit deeper into the red to pay for them.
"I'll leave it to the US administration to justify what they're doing on their budget," Mr Morrison said.
The planned reduction in Australia will cut the corporate tax to 25 per cent for all businesses but the government faces a tough challenge getting it passed into law.
The Nick Xenophon Team and One Nation senators have already said they will block the legislation in the Senate, joining Labor and the Greens who are opposed to the cuts.
Tax cuts were passed last year for businesses with a turnover of up to $50 million.
Opposition Leader Bill Shorten used a speech at the Tasmanian state Labor election launch to have another crack at the government's tax cuts while promising funding for the island state's hospitals.
"Do you know how we can make these promises and find the scarce taxpayers money to pay for them?" Mr Shorten said.
"Because we are not giving $65 billion of taxpayer money to large multinationals and the big banks in unnecessary corporate tax cuts."
But Mr Morrison again pointed out that it was not just the US lowering tax rates, with the UK and France already having done it and Germany considering it.
"So we are seeing corporate taxes coming down and we must remain competitive because if we don't, jobs and investment go offshore, which is bad for people's wages, it's bad for people's jobs and it's bad for growth and the economy," he said.
