The Australian government, keen on reining in debt and maintaining its endangered AAA credit rating, has struck deals with the opposition to pass 6.3 billion Australian dollars ($4.8 billion) in savings through the Senate.

Treasurer Scott Morrison said Tuesday that the cost-cutting bill, which will reduce government payments to families and pensioners, would be introduced into Parliament this week.

The agreement with the opposition Labor Party came in the second week that Parliament has met since elections in July left Prime Minister Malcolm Turnbull's conservative coalition with a smaller minority in a more fractious Senate.

Observers believe the makeup of the senate will make it harder for the government to implement its economic reform agenda as the mining sector continues to decline due to China's slowdown.