Steven Kennedy, the treasury secretary, used a recent speech to urge the government to lower the threshold for fiscal stimulus.
He said the move would allow the government to boost the economy whenever it is flagging rather than just after a "large shock" such as the pandemic.
Kennedy praised the government for already providing 257 billion Australian dollars (about 187 billion U.S. dollars) in direct economic support in response to the coronavirus crisis but noted that there was no more room to stimulate the economy using "conventional monetary" policy.
"Given the lack of conventional monetary support available, the recovery could falter without a strong fiscal policy response leading to years of anaemic growth," he told an Australian Business Economists event on Thursday, according to The Guardian.
"Fiscal policy has always responded to large shocks but there is now a question about whether the threshold for intervention should be lowered."
In addition to the federal government Kennedy said that states and territories "can also play an important role in supporting the economic recovery" by investing in infrastructure projects.
His comments came days after the Reserve Bank of Australia (RBA) cut the interest rate to an all-time low of 0.1 percent to aid the economic recovery.
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