Former prime minister Paul Keating says the Australian economy is "idling at the lights" and needs a government-led infrastructure spending boost that should include a fast train between Sydney and Newcastle.

Mr Keating, speaking to broadcaster Alan Jones on Tuesday, accused the government of having a budget "surplus virus" that was preventing it from using record low interest rates to lift the economy out of its malaise.

Former prime minister Paul Keating says with monetary policy barely having an impact, and the economy growing at 1.4 per cent, it is time for the government to develop a growth-led agenda. Credit:Louise Kennerley

All governments have been urged by the Reserve Bank of Australia (RBA) to use low rates to expand their infrastructure programs in a bid to drive down the unemployment rate and lift wages. The RBA's official cash rate sits at a record low of 0.75 per cent while interest rates on government debt are at near-record lows.

Mr Keating said with monetary policy barely having an impact, and the economy growing at 1.4 per cent, it was time for the government to develop a growth-led agenda.