Business groups are urging Federal Treasurer Josh Frydenberg to do all he can in the budget to restore confidence after the economy plunged into its first recession since the early 1990s.

Economic activity collapsed by record seven per cent in the June quarter as a result of lockdowns in an attempt to contain the coronavirus.

“Part of the job I think of the October budget is to get the confidence back in the community and in business so that people start spending money again,” Business Council of Australia chief executive Jennifer Westacott told the Seven Network’s Sunrise program on Thursday.

“We’ve got to get a plan to get people back to work and we’ve got to get a plan to create new jobs.”

Mr Frydenberg will hand down the budget on October 6 after being delayed from its traditional May release because of the COVID-19 pandemic.

He has indicated the budget could include fast-tracking already legislated personal income tax cuts.

“If you put more money into people’s pockets there will be more spending and more spending will create jobs,” he told the Nine Network.

But shadow treasurer Jim Chalmers says tax cuts are no substitute for a jobs plan.

Labor finance spokeswoman Katy Gallagher also wants to see a permanent rise in the JobSeeker dole payment – due to end in December – beyond the pandemic.

The Australian Chamber of Commerce and Industry wants the treasurer to pursue bold tax reforms.

“For too long tax reform has been in the too hard basket,” ACCI chief executive James Pearson said.

“It must be at the top of the reform agenda if we are to achieve strong, inclusive job-creating growth.”

Mr Frydenberg is also setting his sights on funding major road and rail projects, along with pursuing workplace reforms, to restore jobs.

Australian Industry Group chief executive Innes Willox said it is critical that in responding to the crisis governments also consider the underlying weaknesses in the economy dating from before the COVID-19 crisis.

He said Wednesday’s June quarter national accounts showed business investment has been in decline since the December quarter 2019.

“Incentives to improve business investment will need to be a central part of the fiscal response by the federal government,” Mr Willox said.