Prime Minister Tony Abbott
Prime Minister Tony Abbott

Business warns against inaction on reforms in budget

BUSINESS groups have urged the Abbott government not to shy away from major economic reforms, after Prime Minister Tony Abbott said this year's budget would be "dull".

A joint statement from nine top industry lobby groups published on Tuesday called for reforms to prevent the nation going down a "path to economic despair".

The Business Council, Australian Chamber of Commerce and Industry and the mining and farming lobby groups all endorsed the statement.

But it did not detail what specific reforms each group wanted, despite most pushing in submissions to a Productivity Commission inquiry for changes in workplace relations regulations.

Several groups have released budget submissions arguing for lower corporate tax rates, lower penalty rates and more individual bargaining agreements with workers in recent weeks.

The statement follows wide public rejection of Mr Hockey's first budget and the government's failure to pass many of its measures.

Mr Abbott also said last month Australians could expect a dull and not "exhilarating" budget this year, as the government balances falling revenues with a weakening economy.

The government has backed away from significant reforms and savings measures in recent months, including the GP co-payment and the multi-billion dollar paid parental scheme.

Business urged the government to do "what was right", not what was "politically expedient".

The groups urged the government and opposition to work together on economic reform, even in the face of "vocal and powerful critics", saying the intergenerational report highlighted the need for reforms.