Tough budget necessary: Treasury Sec

Treasury Secretary Martin Parkinson says Australia needs to accept there are economic challenges ahead.

Treasury Secretary Martin Parkinson says Australians needs to know the nation faces a challenges. (AAP)

The Australian public needs to know that the nation faces a challenge and a tough budget was necessary, Treasury Secretary Martin Parkinson says.

Dr Parkinson said while it was not his role to comment on specific government policies, Australians "deserve" to know there is a challenge ahead.

"It's within my responsibility as Treasury secretary to say to the community we do have to actually take this seriously to start to address the issue," Dr Parkinson told a business lunch in Sydney on Tuesday.

"It is (a challenge) that if we start today to take sensible decisions, particularly those that are essentially structural policy changes that take place over time, we'll be in a much better situation.

"Otherwise we're banking the house on 33 years of uninterrupted economic growth and there's no precedent for that.

"We're banking on another 10 years of fiscal drag and ... that has quite significant regressive impacts."