Fighting inflation won't be the sole focus of the upcoming federal budget, the treasurer has declared, warning the slowing national economy can't be ignored.
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Weak growth numbers on Wednesday revealed the economy grew by just 0.2 per cent during the December quarter.
Jim Chalmers said while there would not be a radical shift in the May budget away from reducing inflation, the issue of slow growth needed to be addressed.
"Inflation is still the main game in our economy but the balance of risks is shifting, and so will our strategy - not in fundamental ways but in terms of the difficult balances that we strike between cost of living help and budget repair," he told ABC Radio on Thursday.
"I don't think it will be a fundamental shift.
"There will still be a focus on inflation, there will still be a premium on what is responsible and affordable, but we can't and won't ignore the way that the economy is slowing."
Inflation remains above the two-three per cent target range, lifting 4.1 per cent in the 12 months to December, although it has been cooling more quickly than expected.
Budget repair also remains a priority for the government ahead of its third edition following a $22 billion surplus last financial year and expectations for another one in 2023-24.
Commonwealth Bank economists expect close to a $20 billion surplus, according to a budget forecast update released on Thursday.
Dr Chalmers previously flagged the clean energy transformation, investments in human capital via education and training reform, and the care economy as examples of policy areas where the government was already "laying the foundations for growth".
Shadow treasurer Angus Taylor said he would not be surprised to see "the spigots opened" on government spending in the May budget.
Mr Taylor said additional spending was not the answer to the economic problems at hand and the focus should be on fostering a strong private sector - an area in which he said the government was lacking.
"We need to restore our standard of living and build the foundations for continued prosperity," he said.
"A coalition government will deliver policies that take pressure off small businesses and households, increase home ownership, boost productivity, and reward aspiration and hard work."
Data released by the Australian Bureau of Statistics on Thursday showed a 3.9 per cent decline in housing lending in January following a 4.1 per cent fall in December.
Lending is still 8.5 per cent higher across 12 months.
ABS head of finance statistics Mish Tan said growth in trend terms was 1.5 per cent across the year despite the two months of falls.
She said communication with lenders suggested recent improvements in loan processing times could be allowing for more lending during the peak summer months, influencing the data reading.
Canstar lending expert Steve Mickenbecker said the value of new lending in recent months was "up, down, flying around", suggesting borrowers were largely convinced the property market upswing would not be unwound.
"The biggest recovery is with first home buyers, up 13.2 per cent in a year, and investors up 18.5 per cent," he said.
He said these were the groups that would add to the demand for housing stock and the overall level of debt in the property market.
"The fear of missing out is a prime motivation for first-time buyers and seasoned investors, and rising prices drive them to move early," he said.
Mr Mickenbecker said upgraders were less likely to pile into the market until interest rates fell.
Australian Associated Press
