Treasurer Joe Hockey has sought to soothe concerns over the problems facing Greece and China, saying they will have minimal impact on Australia.
His assurances came as consumer confidence fell heavily for a second week in a row, reeling to its lowest level in a year.
Mr Hockey said successful negotiations between Greece and European leaders were an encouraging first step, but the Greek parliament still has to pass tough austerity measures by Wednesday for a bailout to occur.
He said it was a reminder of the need to be prepared for unexpected events in a volatile global economy.
"There's a salient lesson here not just for Australia, but for everyone, that if you don't undertake the necessary reforms to get your house in order when you can, then ultimately the pain will be much more significant further down the track," he told reporters in Canberra on Tuesday.
He also insisted his budget forecasts remained unchanged despite volatility in the Chinese stock market, saying he'd been reassured by his Chinese counterpart during his recent visit to Beijing about China's fiscal and monetary policy capacity to address some of its challenges.
The treasurer is watching the price of iron ore and the Australian dollar, which both reacted negatively last week to events overseas.
However, he noted iron ore had averaged $US54 ($A72.90) a tonne compared to budget calculations of $US48 a tonne, while the fall in the dollar to a six-year low last week was "welcome in many ways".
"It certainly gives Australian exporters good opportunity that they haven't had for some period of time," he said.
The ANZ-Roy Morgan consumer confidence gauge stumbled 3.6 per cent last week following a 4.6 per cent drop in the previous week.
ANZ chief economist Warren Hogan warns ongoing weakness in confidence will present a risk to the outlook for household spending.
Shadow treasurer Chris Bowen said the result wasn't surprising given the government was "asleep at the wheel" when the nation was being battered by bad news.
He said with Mr Hockey only just returning from vacation, the government had failed to put up a credible minister to explain the potential fall-out for the Australian economy.
Mr Hockey said consumer confidence was a volatile indicator, but he was encouraged by the latest business confidence reading.
It showed a further increase in June and built on the positive response to the May budget to stand its highest level since the September 2013 federal election.
The monthly National Australia Bank survey also showed business conditions rising to their highest level since October.
However, the survey was conducted before the escalation of concerns over Greece following its June 5 referendum.
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