Prime Minister Tony Abbott has indicated the May budget will be less harsh than last year.
In what appeared to be a peace offering after surviving an attempt to have a leadership spill motion in his party room on Monday, Mr Abbott conceded last year's budget may have been "too bold and too ambitious".
But the Organisation for Economic Cooperation and Development says the government must continue its reform agenda.
In a report prepared for a G20 meeting in Istanbul, the OECD urges the government to continue with its infrastructure program, pursue an affordable childcare policy and cut the company tax rate for all businesses.
It has again called for a higher GST rate and broadening its base, changes Mr Abbott only last week ruled out for "this term or next".
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