Scott Morrison insists he and the Reserve Bank are on the same page in their desire to breathe life into the sluggish economy.
Reserve Bank Governor Philip Lowe argues there is an urgent need for more federal government-driven activity, believing its signature income tax cuts will only go so far.
“We agree – and have agreed – for a long time,” the prime minister told ABC radio on Friday.
Dr Lowe is urging the government to borrow more money to pump into public infrastructure projects.
The prime minister said years of coalition budgets had been heavily focused on roads and rail.
“That’s exactly what we are doing,” he said.
“That might be a surprise for those who are coming late to the debate but we have known about this for a long time, that’s why we have been announcing these projects.”
Opposition Leader Anthony Albanese says the government must listen to the central bank.
“It should bring forward infrastructure investment,” he told reporters in Canberra.
“The government’s infrastructure investment package is off in the never-never, just like stage three of its tax cuts.”
Closer to the next election, Labor will review its position on the third stage of the coalition’s income tax closer, which take effect in five years’ time.
“What Labor has done is take a principled stand in the national economic interest. We have laid down markers,” Mr Albanese said after waving the full tax package through overnight.
“The fact is the economy is flatlining at the moment.”
The opposition leader said the Reserve Bank had “rung the alarm bells” with its second interest rate cut since the election.
“They (the government) need to pump up consumer demand and get more money in the hands of Australians,” he said.