The federal government is providing "significant" financial stimulus to keep Australia's economy humming along as it monitors developments at home and abroad, the finance minister says.
Labor has criticised the government for not doing enough in the wake of the slowest economic growth in a decade, as the central bank appears to be running out of monetary policy options after taking interest rates to a record low.
"We will continue to make judgments in the context of obviously the economic data and what is in the best interests of keeping the Australian economy strong moving forward," Finance Minister Mathias Cormann told Sky News on Friday.
The government's 2019/20 budget handed down in April was framed in the context of global economic headwinds and downside risks for the domestic economy, offering tax cuts and a boost in infrastructure spending.
"We very much have a pro-growth budget, a plan to build a stronger, more resilient economy into the future to deal with all the challenges in front of us," Senator Cormann said.
But, as Labor points out, Reserve Bank of Australia boss Philip Lowe has called on the coalition government to do more to lift the economy because there's a limit to want monetary policy can do.
Senator Cormann countered this by highlighting the RBA's September 3 statement forecasting growth to gradually strengthen on the back of low interest rates, income tax cuts, infrastructure investment, property market stability and a competitive exchange rate.
The finance minister's defence of the government's fiscal policy comes after data this week showed business conditions had fallen to a near five-year low, continued weakness in the manufacturing sector and a more pessimistic mood amongst consumers.
The Westpac-Melbourne Institute consumer sentiment survey also showed more than 50 per cent of households that got a tax refund planned to spend less than half while 25 per cent planning to save it all.
In the previous week, the Australian Bureau of Statistics national accounts report showed economic growth had slowed to just 1.4 per cent in the last financial year.
According to the Organisation for Economic Cooperation and Development, year-on-year growth for the G20 countries, including Australia, slowed to 2.9 per cent from 3.1 per cent previously.
At a time of global uncertainty, federal Treasurer Josh Frydenberg has now joined Canada, Indonesia and Singapore in urging the United States and China to end their long-running trade war and warning of the collateral damage from the protracted dispute.
"While respecting each country's domestic priorities, we should be clear that protecting free and open markets will ensure stronger growth and greater prosperity for all," they said in a joint statement on Friday.
"We must not resort to unilateralism and protectionism. Pursuing confrontation over dialogue will only exacerbate risks, erode confidence and weaken the prospect of global economic recovery."