The federal government has labelled the drop in the gross domestic product a wake-up call.
But the Australian Council of Trade Unions' Dave Oliver says it was far from unexpected.
"We've seen that unemployment's been on the rise. We've seen jobs disappearing. We've got a government that's now actively cutting jobs out of the public sector and is putting a lid on any kind of wages growth, a government that doesn't support wage increases. And it's a no brainer, anyone should know, including the Treasurer, if you want to stimulate the economy, you should be supporting to get real wages growth out there. So, it's a bit rich for the Treasurer to say it's a wake-up call when his hands are on the steering wheel and it just seems that he's been asleep at the wheel."
Mr Oliver is calling on the government to provide a solid plan for economic repair.
"We want to see where their plan is. They need to have a real plan about attracting investment. They need to have a plan about real job creation programs."
But Treasurer Scott Morrison says he has a plan.
He says the plan is for strategic investment in Australian infrastructure.
"What we're doing is focusing on strategic investments, whether it's the inland rail project, or it's on water infrastructure, or it's on airport infrastructure and the roads and rail lines and these sorts of things that support these types of important strategic investments."
Poor consumer spending and a drop in business investment has been blamed for the drop in the gross domestic product.
Mr Morrison says getting the Coalition's proposed company tax cuts through parliament would help reinvigorate business investment.
"The thing that is the issue is 12 consecutive quarters of negative on business investment. That's what we have to fix. And that's what our tax plan fixes."
Australian Industry Group head of policy Peter Burn echoes that argument.
"A reduction in the company tax rate would certainly help business investment in Australia. I don't think anyone seriously questions that. Of course, it would have a cumulative effect over time and the immediate effect would be some increase, but it would slowly rise and we would still need, of course, confidence to build in order for that investment to occur. But, certainly, a lower company tax rate and lower taxes on company incomes would boost the levels of investment."
Business Council of Australia president Grant King has raised concerns an economic slowdown will put Australia's AAA credit rating at risk.
"Preserving our credit rating is critical because Australians expect the government to be the insurer of last resort and to protect us from the circumstances we can't protect ourselves from. It has to restore our budget."
But Dr Burn, with the Australian Industry Group, says he is confident the Australian economy will bounce back.
"There's growth indicated across the services industries and also in manufacturing, and so that points to a stronger December quarter than the September quarter."
