Treasurer Josh Frydenberg is hoping Australians hit the nation's shops and spend their tax refunds as signs grow that the surge in business and consumer confidence since the Morrison government's re-election is starting to wane.

Mr Frydenberg said he was confident the refunds, the first part of the government's 10-year, $158 billion tax package, would be recycled through the economy, along with the money freed up by the Reserve Bank of Australia's recent cuts in official interest rates.

Treasurer Josh Frydenberg is hoping shoppers use their tax refunds to funnel their cash back into the economy. Credit:Alex Ellinghausen

More than 810,000 people, a record so early in a new financial year, have already submitted their tax returns, with refunds worth up to $1080 for low- and middle-income earners set to hit bank accounts from Friday.

The Treasurer said with the Australian Prudential Regulation Authority loosening loan restrictions on the nation's banks and the cut in interest rates there would be more money flowing through the economy.