Rolling out promised tax cuts and the central bank's historic rate cut will encourage more people to splash cash and help keep Australia's economy humming, Josh Frydenberg believes.
The treasurer has issued the reassurance after new figures showed Australia's economy grew by a modest 0.4 per cent in the three months to March and by 1.8 per cent in the previous 12 months.
That is the weakest growth throughout the year since September 2009, at the end of the Global Financial Crisis.
Government spending made a major contribution to growth in the latest quarter, with more cash flowing into disability, health and aged care services.
But household spending was weak, with people buying fewer non-essential goods, including furniture and meals at restaurants.
"It is part of the reason why the economy is softer than it was at the same time last year," Mr Frydenberg told reporters on Wednesday.
The treasurer is confident his government's promised tax cuts, set to help low and middle-income earners keep more of their pay from this year, will help ramp up the nation's spending power.
He thinks the Reserve Bank's decision on Tuesday to cut the official interest rate from 1.5 per cent to 1.25 per cent won't hurt either, as it helps to take the edge off some people's mortgages.
"The provision of the tax cuts, as well as the interest rate decision yesterday, will boost household disposable incomes and will be important as part of compensation," he said.
The south-eastern drought also took a toll on growth, with farm GDP down on the same time last year, and crop production falling in the quarter.
But despite Australia also facing "real international and domestic challenges", the treasurer argues the "fundamentals" of the economy are sound, particularly the labour market.
The proportion of working age Australians on welfare was at a 30-year low, a triple-A credit rating remained in place and the nation was in its 28th consecutive year of economic growth, he stressed.
Shadow treasurer Jim Chalmers sees things differently, highlighting falls in productivity in the past four quarters and wages growing at an eighth of the pace of company profits.
"This meagre growth, with a one in front of it, comes courtesy of six years of stagnation, and finger-pointing and blame-shifting and dysfunction and drift," he told reporters in Brisbane.
"It is long past time for this Liberal government to take some responsibility for the fact that we have feeble economy growth on their watch."
Earlier, the two men were on the same page in arguing Westpac and ANZ owed their customers an explanation, after keeping some of the central bank's rate cut for themselves, despite their own funding costs recently falling from high levels.
Both said displeased customers could make their distaste known by heading elsewhere.
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