Joe Hockey insists his May budget shouldn't be seen as tough - just as the right thing to do.
The treasurer points to the turmoil in Greece, whose latest bailout extension talks with other Eurozone ministers collapsed on Monday.
Australia must make sure it never gets in that position, he says.
"If we make the right decisions now, we can make sure we never get there," he told Fairfax radio on Tuesday.
"If we think that we can just keep putting everything on the credit card, then one day we are going to face a very difficult road."
Reserve Bank governor Glenn Stevens raised his concerns over the nation's growing government debt last week, saying action was needed now to fend off a "significant problem" in the future.
Opposition employment spokesman Brendan O'Connor believes that, while Australia's debt remains low relative to comparable countries, there should be a measured response to it.
"But ... we do not expect the most vulnerable in our community to suffer and allow those who are doing very well indeed not to feel any pain whatsoever," he told Sky News.
Mr Hockey says the upcoming intergenerational report will highlight the challenges Australia faces over the next 40 years, and why the Abbott government is so focused on living within its means and paying down debt.
"We want to make our future sustainable," Mr Hockey said.
The fourth edition of the five-yearly review will be released at the end of the month and will contain both "startling and very encouraging" statistics about Australia's future.
The release will coincide with a "very deep engagement program" that will reach out to the community and is aimed at collectively solving some of the problems and challenges facing Australia over the next few decades.
"It's exciting. I think the nation is ready for a conversation about our future," Mr Hockey said.
It will show Australians are living longer, but that will mean providing better quality of health care, aged care and education.
"We can do it. We have just got to work at it," he said.
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