The federal government's promised tax cuts have passed the Senate just weeks after they were launched as an election promise.
However, senior lecturer at the University of Wollongong's School of Accounting, Economics and Finance Dr Oleg Yerokhin said more than tax cuts are needed to stimulate the struggling economy.
Dr Yerokhin said with unemployment relatively high, and the economy "not growing as it should", the government needs to spend more on infrastructure to create jobs, but is hesitant due to being "ideologically against budget deficits".
"If the purpose is to stimulate the economy, you need to increase spending. It's one of the best ways to stimulate the economy when it's slowing down," he said.
He said the tax changes "make sense economically", but will do nothing more than adjust incomes to more closely match rising costs in living.
"There has been a lot of ideological push, but it's not really a big deal. People find themselves in higher brackets just due to inflation, and this will streamline and optimise the income tax schedule, which is not unusual," he said.
He said while there will only be a "minor boost" to the region's poorest residents, the changes will increase incentives to work.
"When income tax is too high people are less likely to supply labour and work," he said.
Reserve Bank of Australia governor Philip Lowe has also urged the government to invest in infrastructure after dropping interest rates to a record low of one per cent last week. This year's federal budget saw $100billion announced for land transport infrastructure over 10 years.
Dr Yerokhin said the Reserve Bank is unlikely to delve into negative rate territory, after experiments in Japan and Europe failed after commercial banks were "lured into risky investments".
"The traditional banking model is broken because they are not making money off interest rates," he said.
Eden-Monaro Labor MP Mike Kelly said he had hoped his party could push through amendments to the bill, which he said would have brought forward tax cuts and infrastructure investment, providing "a shot in the arm to our economy in the national interest".
"Australians know something is wrong with the economy. They know their wages are stagnant while their bills are increasing. Labor is trying to be constructive to support a rapidly changing economy, but the government is just playing politics," he said.
"The [Reserve] Bank is begging the government to do its part by getting wages growing and spending on infrastructure while the cost of money is so low," Dr Kelly said.
Dr Yerokhin said it is difficult to measure what residents will do with their tax savings.
"I wouldn't rely on this money being spent, because people tend to save, which is why the government needs to spend on infrastructure," he said.
Local small business owner Ged Gross said anyone earning over a quarter of a million dollars a year should be taxed heavily, adding he struggles with the fact he pays more for Australian gas than others are paying for it after it is exported.
"We get asked all the time why we don't put on staff, but there's no incentive. We just can't do it. I have a family and I can't risk it," he said.
"Instead of riding on the pig that is small business, government needs to support it."