There is a clear political imperative for the Government to make sure its income tax cuts kick in, as promised, in people's 2019 tax returns.

It would not be a great start to a new term to break faith on a key element of the election campaign.

But there is also an economic imperative for the immediate low and middle-income tax cuts to be implemented in time for people to get their beefed-up refunds from July 1 onwards.

The Reserve Bank highlights the effect of the immediate tax cuts — promised by both major parties before the election — in its latest Statement on Monetary Policy from May 10.

In its forecasts, the RBA includes the effect of the low and middle-income tax offset, worth as much as $1,080 for people earning up to $90,000 a year, and due to be received by taxpayers when they file their tax returns from July 1.

"The forecast incorporates the increase in the offset announced in the 2019/20 budget," the bank noted.

"The total benefit to households from the offset is around 0.6 per cent of disposable income each year over the forecast period."

In its analysis of the election result, CommSec observed that more than 10 million taxpayers would benefit, with 4.5 million receiving the full amount — those with taxable incomes between $48,000 and $90,000.

The Government's longer-term tax cuts, mainly targeted at higher income earners, do not kick in until 2024 anyway and are not an immediate concern for economic policymakers.

Stimulus cannot wait

But there is little doubt the income boost from a supersized tax return for low and middle-income workers would be beneficial now.

The Reserve Bank is expecting consumption growth of just 2 per cent this year, which is little more than population growth, meaning that each person's spending is essentially flat. And that was assuming people do get a tax cut in their refunds this year.

Weak consumption and the property downturn were the key drivers of weak annual economic growth of just 2.3 per cent last year, with GDP growth running at an annualised rate of only 1 per cent over the second half of the year — below population growth, a per capita recession.

Growth is not expected to pick up at the start of this year, with most economic indicators having weakened further since late 2018, including the ones the Reserve Bank most closely focuses on — inflation and unemployment.

Markets are already pricing in a better than 50 per cent chance of an interest rate cut in June, and a greater than three-quarters chance of at least one rate cut by August.

Those odds are only likely to increase if the expected stimulus from tax cuts does not arrive this year.

The Reserve Bank's forecasts also incorporate then-market pricing of two rate cuts between now and early next year.

Despite incorporating tax cuts and rate cuts, the economic performance the bank forecast is still at, or below, the bottom of its inflation target and well below what is considered "trend" or average levels of growth.

If you take some of the Government fiscal stimuli out of those forecasts, it can only leave it more up to the Reserve Bank to add extra monetary stimulus through further rate cuts.

RBA may have to do the heavy lifting

But with the federal budget nearing surplus while interest rates already sit at record lows of 1.5 per cent, the Government seemingly has a lot more room to move than the RBA.

This morning, a spokesman for Prime Minister Scott Morrison insisted the tax cuts would be delivered during the next financial year.

"Tax relief will be delivered in 2019-20 as promised, and will not be delayed by a year by the Parliament not sitting in June as speculated in the media today," he said.

Last month, the Australian Tax Office released a statement that confirmed it needed Parliament to change the law to implement a tax cut.

"If the law for these tax cuts passes after June, we could also retrospectively amend assessments to provide the tax cut once the law is passed," the ATO statement noted.

But the tax legislation still has to pass and, if the Government refuses to split the widely supported immediate tax cuts to middle and low-income earners from the more contentious longer-term cuts for middle and higher income earners, that could still take some time.

In the meantime, the Reserve Bank will be forced to continue the heavy lifting to keep Australia's economy ambling along.

As highlighted by the bank regulator APRA's move today to relax mortgage serviceability tests through lower interest rate buffers, the main way it can do this is by encouraging households who already bear record debt levels to borrow even more.