New Australian Treasurer Chris Bowen indicated policy changes may be forthcoming for the country to avoid hitting recession. He told Parliament on Thursday that the Labor government recognises the country's economy is in transition as it moves from investment phase to production phase in the mining industry.

However, Mr Bown said that beside the changes which are hinged on the election date which could likely be moved earlier to August from Sept 14, there would also be some continuity is some policies.

Mr Bowen took over on Friday the position vacated by Treasurer Wayne Swan who resigned when Prime Minister Julia Gillard lost on Thursday night the leadership of the Labor Party. However, he is not new to the job, having been the assistant treasurer in 2008 to 2009. He also served under Ms Gillard as minister for immigration, tertiary education and small business.

Saul Eslake, chief economist at Bank of America Merrill Lynch, said one of the first challenges that the new treasurer has to address is to improve relations between business and government caused by the mining and carbon taxes approved under the Gillard government.

Mr Eslake had warned of the risk of recession in 2015-16 because of declining investment in the energy sector.

Reports said that Prime Minister Kevin Rudd will include the controversial carbon tax in the agenda on his first cabinet meeting on Monday, the first year anniversary of its collection, which also would bring the tax price up 2.5 per cent to $24.15 a tonne from the current $23.

The carbon tax would only move to a floating price in line with the European Union by mid-2015. But moving earlier to the floating price as suggested by some groups is a complex decision since it could be very difficult to unwind the scheme.

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