Treasurer Scott Morrison says the most significant challenge for Australia's economy is encouraging investment.
"Supporting investment in our economy is critical and it is not just a problem that Australia has, it is shared by the world's economies - China, United Kingdom, the United States, across Europe, South-East Asia," he told reporters in Melbourne on Wednesday, just a week after he moved to block two Chinese bidders from the sale of a 99-year-lease on the NSW Ausgrid electricity network.
Mr Morrison said strong investment created more jobs, but it had to be supported by a strong commonwealth government balance sheet as well.
Mr Morrison said he had paid close attention to outgoing Reserve Bank chief Glenn Steven's comments that Australia needed to attract more foreign investment to build new businesses while being cautious about existing assets.
Mr Stevens was "absolutely right" to say it was better for governments to borrow to build productive infrastructure than to make payments.
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"Where I commend the NSW government is that they are seeking to realise assets in order for them to invest in productive infrastructure," the treasurer said.
