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Budget repair 'front of mind': PM


Prime Minister Malcolm Turnbull has promised budget repair will be a "front of mind issue" for the entirety of the new parliament.

Announcing his new frontbench on Monday, Mr Turnbull said the need for this approach has been reinforced by world's three major credit rating agencies.

"Only the coalition has a credible fiscal strategy ... we have to live within our means," he told reporters in Canberra.

Since the July 2 election, Standard & Poor's has revised Australia's triple-A rating outlook to negative, concerned the tight election result and larger crossbench in the Senate will put budget repair at risk.

Prominent economist Chris Richardson is also concerned about the possibility of further political gridlock.

The Deloitte Access Economics director warns the government will struggle to achieve much needed reforms, particularly when reform will almost always be unpopular.

It means proposals won't make it through the Senate, assuming they haven't been shelved before even getting to the upper house.

"To put that differently, both better living standards and budget repair require bipartisanship and we can't say we expect to see too much of that," Mr Richardson says in his latest business outlook.

Mr Turnbull said legislating for the budget will be a high priority when parliament returns at the end of August and will remain the same as the economic plan taken into the election.

He is determined to do everything he can to work with all 226 members and senators to ensure all objectives set out in the budget are met.

Tax cuts announced in the budget, that include a reduction in the company tax rate for small business as the first leg of a 10 year plan, will go ahead as promised.

While the reduction from 28.5 per cent to 27.5 per cent for small businesses with a turnover of under $10 million were due to come into operation from July 1, they will be legislated so people's tax returns are adjusted so there is no loss at the end of the tax year.

The increase for the upper limit for the middle income tax bracket from $80,000 to $87,000 was also due to start on July 1 to prevent 500,000 taxpayers being forced into higher tax bracket through wage inflation, otherwise known as bracket creep.