The federal government's planned surplus for the 2019/20 financial year supports the view of ratings agencies that Australia's credit outlook is stable and its top line rating will remain in tact.
S&P Global Ratings analyst Anthony Walker said Treasurer Josh Frydenberg's budget on Tuesday confirmed the coalition was on track for stronger-than-anticipated near-term fiscal outcomes because of robust commodity prices and terms of trade.
"This has helped to deliver higher revenue growth, while at the same time better labour market conditions have lowered expenditure outflows compared with previous budgets," Mr Walker said.
"These stronger outcomes have helped to fund new policy announcements."
The budget forecasts a $7.1 billion surplus in 2019/20 - the best number since the global financial crisis began to bite - outstripping the government's earlier projection of $4.1 billion.
S&P Global Ratings upgraded its Australian outlook to 'stable' in September last year, having downgraded it to 'negative' in July 2016.
It current pegs Australia's credit rating at AAA, the highest possible.
"When we revised our rating outlook in September 2018 based on a return to fiscal surplus, there was significant market uncertainty around Australia's political and future fiscal position," S&P Global Ratings said in a separate statement.
"The federal budget released today supports our view that the government is on track to return to surplus."
Meanwhile, Moody's Investors Service said the budget indicated an ongoing, but modestly slower, pace of fiscal consolidation than was previously indicated at budget review in December.
Martin Petch, Vice President, Moody's Investors Service, said Australia's high levels of debt affordability and moderate debt burden meant the nation would likely remain in line with its Aaa-rated peers.
But he said there risks to the fiscal outlook remained.
"The world and Chinese economies are slowing modestly, while the pace of Australia's domestic economy will also slow this year," Mr Fetch said.
"In this climate of slower growth, the impact of still-weak wages growth, lower housing prices and a potential easing of employment growth are key uncertainties for spending and government revenues, though personal tax cuts should help to offset these factors."
