Two major hurdles that have weighed heavily on the global economy appear to have been cleared.
The first stage of the US-China trade deal appears to have been concluded, while UK voters have returned Prime Minister Boris Johnson with a thumping majority, suggesting Britain will be leaving the European Union on January 31 after years of division.
But federal Labor says it does not let Australian Treasurer Josh Frydenberg off the hook from doing anything meaningful to stimulate the economy when he hands down his mid-year budget review on Monday.
"The challenges in the Australian economy are primarily homegrown," Labor finance spokeswoman Katy Gallagher told AAP on Saturday.
"The Morrison government is responsible for slow growth, higher unemployment, stagnant wages, pathetic productivity and business investment, and record household and public debt."
Economists expect Mr Frydenberg's Mid-Year Economic and Fiscal Outlook will show the treasurer is on course to deliver a budget surplus in 2019/20, the first since Peter Costello 12 years ago.
However, economic growth forecasts are expected to be cut after a run of poor economic data results.
AMP Capital chief economist Shane Oliver expects the growth forecast for 2019/20 to be cut to 2.25 per cent from the 2.75 per cent predicted in the pre-election budget in April.
The wage growth forecast is also expected to be reduced to 2.3 per cent from 2.75 per cent.
"However, the recent run of weak economic data does not appear to have been bad enough to move the government to announce a significant new fiscal stimulus just yet," Dr Oliver said.
"Rather the MYEFO is likely to emphasise the bring forward of infrastructure spending and extra drought assistance, although in total its small."
But Senator Gallagher insists the economy needs "responsible, proportionate and measured stimulus" now.
She said the government could run with a number of suggestions put forward by Labor.
They include increasing Newstart, as well as bringing forward more infrastructure spending, an incentive for business to invest and the second stage of legislated personal income tax cuts.
She said the government also needs to come up with a real wages policy and "settle an energy policy after 16 failed attempts".
The International Monetary Fund in its annual appraisal of Australia released on Friday said with "below-potential economic growth, weakening inflation expectations and continued downside risks, the macroeconomic policy mix should remain accommodative".
It says Australia has "substantial fiscal space" it can use if needed, but budget repair would need to be delayed.
Australian Associated Press
