National

Treasurer can stimulate, keep surplus: ALP

By AAP Newswire

Treasurer Josh Frydenberg has shut the door on the idea of extra stimulus measures to support a slowing economy, remaining committed to a budget surplus as planned.

But shadow treasurer Jim Chalmers believes the government can do both while taking responsibility for a floundering economy.

Mr Frydenberg told an audience in London on Friday he believes his "reform agenda" of tax cuts, infrastructure spending and skills training will be enough to revive the tepid economy.

He said the government remains "absolutely committed" to a surplus and won't borrow money for additional stimulus measures should the economy slow even further.

"No ... we took to the election our budget commitments and we will faithfully implement them," the treasurer told the Australia-UK Chamber of Commerce.

"We need to maintain the course, stick to our economic plan as set out in the budget, which is all about a growth agenda."

Dr Chalmers wants the government to split its tax cut package so low and middle income earners get relief now, while bringing forward planned infrastructure spending, saying it won't necessarily trouble the surplus.

"The surplus is there because we are getting extraordinary prices for our iron ore in particularly, and company profits are quite high," he told reporters in Brisbane on Saturday.

"He has no excuse for failing to deliver a surplus and at the same time takes into consideration the fact the economy has slowed substantially on his watch."

The Reserve Bank earlier this month cut the cash rate to a record low of 1.25 per cent as the economy eased to its slowest pace since the global financial crisis, while urging the government to lift infrastructure spending to boost growth.