Prime Minister Julia Gillard says putting the budget back into surplus will make it easier for the Reserve Bank to cut interest rates.

Gillard told ABC Radio today it was an "economic imperative" to deliver a surplus in the May budget. “We want to make sure that the Reserve Bank has the room to move, should it choose to do so," she explained.

"Australian businesses, many of them doing it tough because of the strong Australian dollar, have said to me that they would like to see an interest rate cut.”

The Prime Minister said returning the budget to surplus would provide confidence during uncertain economic times.