Australia's business chiefs are urging federal and state governments to remove roadblocks to investment as economic growth stalls.
The mid-year budget update released on Monday pointed to a $5 billion surplus but downgraded the economic growth forecast for 2019/20 to 2.25 per cent from 2.75 per cent.
However the latest national accounts released on December 4 showed the economy expanded 1.7 per cent in the year to September.
Weak momentum in the global economy, as well as domestic challenges such as the drought and bushfires have been blamed for the softness in the figures.
The Business Council of Australia on Friday released its 2020/21 federal budget submission, which backed the return to surplus but called for greater economic reform and long-term planning.
"An economy growing below two per cent will simply not deliver the jobs, higher wages, improved living standards and the tax revenue to fund services Australians expect," chief executive Jennifer Westacott said.
"Our focus must now turn to getting the private economy to work harder so it can do the heavy lifting and accelerate economic growth."
Business Council president Tim Reed said the budget surplus, which the government says it will deliver, is not just a book-keeping exercise.
"We spent about $19 billion on interest payments last year which is money that could be spent on vital services such as world-class hospitals, schools and transport services, or to lower taxes,'' Mr Reed said.
Ms Westacott said the "underlying structural weakness" in growth could not be solved by short-term stimulus or rushed spending on projects.
The submission calls for:
* a permanent investment allowance, which would apply to machinery, buildings, energy assets, new technology, resource exploration and development, and worker skills
* cuts to red tape at a state and federal level, especially dealing with major project approval
* infrastructure projects that make it easier to do business, export products and reduce congestion
* a revamped skills system
* a new industry policy
* long-term tax reform.
On the issue of tax reform, the council says more work is needed on improving incentives for low- income earners.
And the government needs to have another go at lowering the company tax rate to 25 per cent for all sized businesses.
Mr Reed told AAP the Intergenerational Report - a five-yearly review of how the country's population and age profile could impact on the budget and economy - should be extended to include the states in a bid to drive long-term reform.
"There's pressure coming on state budgets, as well as the federal budget and we need to think more holistically," he said.
Australian Associated Press