SYDNEY (AFP) - Flagging in the polls and facing a rout in the May general election, Australia Prime Minister Scott Morrison looked to shore up support on Tuesday (Dec 18), teasing AUS$9 billion (S$7.9 billion) worth of tax cuts.

"We support lower taxes," said treasurer and deputy prime minister Josh Frydenberg, touting "important" tax decisions ahead.

A mid-year budget released on Monday showed the government running a smaller deficit than expected and possible surplus next year.

That amounts to a much-needed AUS$9.25 billion election war chest for Morrison.

His conservative coalition is ten points back in the polls and facing a thumping loss to centre-left Labor, according to a recent Newspoll survey.

Hoping for a little Christmas cheer to improve his sagging fortunes, Morrison looks almost certain to dole out the goodies to sceptical voters.

The government did not spell out what the tax cuts could be, but they were budgeted for in the fine print of the plan under "decisions taken but not yet announced."

"This is tax cuts (or possibly spending measures) due to be announced between now and next year's election," said Andrew Hanlan, an economist with Westpac.

Experts said the smaller deficit was thanks to higher tax revenues stemming from stronger growth and higher commodity prices.

Australia's economy has been growing steadily for decades, but has started to slow amid trade disputes between China and the United States and domestic pressures.

An election date has not yet been set, but it is widely expected by May next year.