But shadow treasurer JIm Chalmers believes the government can afford to put in place "reasonable, proportionate and measured" stimulus in a way that won't prevent the budget from returning to the black.

Mr Keating, the former Labor prime minister and treasurer, told the Weekend Australian the quest for a surplus should not be regarded as sacrosanct.

Instead, the government should embark on productivity-enhancing infrastructure spending and turbo-charge vocational educational trading.

"Monetary policy has run its race. There is no more that cental banks can do," Mr Keating told the newspaper on Saturday.

"Even if the Reserve Bank of Australia moved into the Australian version of quantitative easing, the impact would be so economically marginal as to be not worth doing."

The central bank has cut the official cash rate three times in recent months to a record low of 0.75 per cent and financial markets see a 50/50 chance of another reduction before the end of the year.

There has been speculation the Reserve Bank may have to turn to unconventional monetary policy if the cash rate is cut much further - such as quantitative easing that was implemented by the US and European central banks during the global finance crisis.

That would mean the central bank buying government bonds and other securities in order to increase the amount of money flowing in the economy to encourage lending and investment.

Finance Minister Mathias Cormann dismissed the suggestion.

He said the Reserve Bank governor Philip Lowe has repeatedly made it clear that he cannot foresee the circumstance where Australia would turn to unconventional monetary policy.

"Don't believe everything you read in the newspaper. There is a lot of hyperventilating, a lot of crazy speculation from people that are quite misinformed," Senator Cormann told reporters in Perth.

Mr Keating also slammed the government for lying during the election campaign by telling voters 'we are running a strong economy'.

Data since showed the economy was growing at just 1.4 per cent, half the average rate of the last 30 years, he said.

"This is not a record one would boast about," Mr Keating said.

"The case for fiscal expansion is simply staring you in the face."

Dr Chalmers said what is happening is the consequence of a government which has a political strategy to bang on about Labor but not an economic plan to turn things around.

"The government needs to stop pretending that everything's hunky-dory in the economy," Dr Chalmers told reporters in Brisbane.

"The absence of a plan so far means that Australians are struggling and the economy is floundering."

On Friday, Senator Cormann said the government is ready to do more to help lift the economy but isn't prepared to waste a "crazy" amount of money as it claims former Labor prime minister Kevin Rudd did during the global financial crisis.

The Weekend Australian newspaper also reported that Treasurer Josh Frydenberg met with ANZ chief executive Shayne Elliot and National Australia Bank chairman Philip Chronican on Friday, urging them to loosen credit and encourage home buyers.

Australian Associated Press