Australia can't afford to be complacent about its high ranking credit rating, the head of Treasury has warned.
John Fraser says the nation needs to remain at triple-A ranking to ensure it can service commonwealth debt.
The interest bill is currently running at just over $1 billion a month.
"This is projected to more than double within the decade, unless action is taken to improve our budgetary position," Mr Fraser told the Sydney Institute.
Mr Fraser said current tax receipts were "massively" lower than forecast just three years ago, while the country's net debt was reaching levels not seen since the early 1990s.
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Australia is one of only ten countries with a triple-A credit rating from all three of the major rating agencies.
"But this rating is dependent on credible fiscal consolidation and a smooth transition to a more diverse economy," Mr Fraser warned.
"We should not be complacent about this."
Mr Fraser made the case for the federal government to embed savings that can be sustained over the longer term to reduce the budget deficit.
"Simply increasing the overall tax burden to raise more revenue is not the answer," he said on Thursday night.
Mr Fraser steered clear of questions about whether or not the GST should be raised.
But Australia couldn't afford to shy away from overhauling competition policy and improving productivity as well as tackling tax reform.
