The federal parliament passed the three-stage package late on Thursday, with Labor in the end waving the legislation through after failing to get support to split the bill.

"This is a critical first step to ensure the Australian economy can grow faster," Business Council of Australia chief executive Jennifer Westacott said in a statement on Friday.

Reserve Bank governor Philip Lowe has repeatedly urged the Morrison government to lift spending beyond the tax cuts to help lift economic growth.

Recent interest rate cuts won't be enough to boost the economy, he says.

Australian Chamber of Commerce and Industry CEO James Pearson said with the tax cuts agreed he looks forward to working with the government to strengthen the economy.

"This includes practical reforms to industrial relations, investment in skills and infrastructure and reducing red tape to boost jobs and opportunities for all Australians," he said.

Australian Industry Group chief executive Innes Willox said the passing of the tax cuts is an encouraging start to the new term of parliament.

"The cooperation of crossbench senators in the passage of the tax bills bodes well for future reform measures," he said.

Australian Associated Press