The Secretary of the Treasury, Martin Parkinson has defended the reasoning behind last week's Federal Budget saying it attempted to balance what the community expects of the Government and what they are prepared to pay for.
Dr Parkinson said these were "significant gaps" and the Budget attempted to tackle them "head on".
Speaking to the Australian Business Economists (ABE), in his fourth and last ABE Post-Budget address as Treasury Secretary, Dr Parkinson said returning the Budget to surplus must be underpinned by policy change - by individual, hard decisions - not assumptions.
"Restoring Australia's fiscal sustainability cannot be wished into being," he said.
Dr Parkinson said there were three elements to the Budget: a measured pace of fiscal consolidation; a switch in spending with current consumption reduced and investment in new assets prioritised; and, a decision to ensure headroom for future tax cuts to offset the effects of "fiscal drag" on workforce participation and the ''progressivity of the tax system."
The infrastructure initiatives were "timely" as they would support growth at a time when there was expected to be excess capacity in the economy, particularly in engineering construction as large resources projects reached completion, Dr Parkinson said.
"While the 2014-15 Budget is a significant step towards addressing Australia's fiscal challenges, placing Government finances on a sustainable path, the Budget also includes measures that seek to raise productivity and workforce participation," he said.
The full deregulation of the higher education sector would encourage Australian universities and other higher education providers to offer what students and businesses require, at a standard that suited the needs of the future workplace, he said.
Dr Parkinson said the backdrop to the Budget was an economy that was growing at a below-trend rate amid the transition from the largest resources investment boom in Australia's history to broader-based growth.
"The reality is that we need other sectors of the economy to grow more rapidly to keep unemployment low," he said.
"It will be at least another year or two before strong broad-based growth takes hold."
Public Service news and events from around the world
In depth discussions on current topical issues
Expert advice in areas such as training, development, grooming and health.
Photos and faces from PS gatherings
A weekly round-up of features of interest to the Public Service
Reviews of some of the latest, most relevant books of interest to PS News readers
The latest and best in special interest and collectable DVDs and Blu-Ray movies
With travel, wine and dine, motoring and movies