Prime Minister Scott Morrison isn’t about to loosen the budget purse strings in the face of the slowest economic growth in a decade, when the economy was in the grips of the global financial crisis.

Labor, the Reserve Bank and others have urged the government to do more to lift economic growth at a time of domestic and global challenges.

The quarterly national accounts released this week showed economic growth had slowed to just 1.4 per cent in the year to June and around half the pace of the country’s long-term average.

But the prime minister has told a NSW Liberals State Council meeting in Sydney his government must live within its means and keep to the surplus it promised in the April budget.

“It’s taken us 12 years – six in our own making – to get this back into surplus this year,” he told the party faithful in his home state on Saturday.

“We are only in our first surplus year and Labor is already wanting to spend it all in an afternoon, flailing their hands about like they did last time when Australia went into difficult times.”

He said the country is still paying off debt from the lack of fiscal “discipline and calmness” by Labor.

He took the opportunity to thank former prime minister Tony Abbott, who lost his seat at the May 18 election, for his leadership that returned the coalition to power six years ago to the day.
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Here we are six years later honouring what we took to the people six years ago and implementing and delivering, even still now,” he said.

But shadow treasurer Jim Chalmers said after six years the government has no plans to deal with stagnant wages, high household debt, and the weakest growth in a decade.

“If only the prime minister spent as much time coming up with an economic plan as he spends banging on about us, the country would be better off,” he told reporters in Brisbane.

“We’ve had six years, three prime ministers, three treasurers, but nothing which resembles a plan to get this floundering economy going again.”

In a rare interview for a Reserve Bank governor, Philip Lowe told Nine newspapers he believes the government can do more to generate economic activity.

“The best option … (is) creating an environment where firms want to innovate, invest, expand and hire people,” Dr Lowe says.

“I think that’s the best option. I’m sure at the analytical level the government would agree. The challenge they have is to develop a program to do that.”

Dr Chalmers said the apparent split between the Reserve Bank and government is “very troubling” when fiscal and monetary policy should be operating in concert.

“Who do you trust on the economy? The Reserve Bank governor or the man without a plan, Scott Morrison?” he quipped.

– AAP