Demand for more government services would reduce any budget surplus achieved beyond the next four years, Parliamentary Budget Officer Phil Bowen says.
Mr Bowen told a Senate estimates hearing in Canberra on Monday there was a need for a “serious discussion” about trade-offs between government spending and revenue.
“Despite forecasts of a return to surplus shortly after the forward estimates period, there is still an evident structural imbalance appearing beyond that period,” he said.
“Because the surplus then continues to decline – it’s an imbalance between expenditure and revenue.”
Under current government policy, tax revenue is to be capped at 23.9 per cent of GDP from 2020/21, Mr Bowen said.
But there was little doubt the community had a high expectation of government providing “more and more” services.
Australia was facing slowing GDP growth and there was an absolute decline in gross national income per person over the past three years, Mr Bowen said.
In the medium to longer term the answer lay in boosting productivity, especially labour productivity which was trending “significantly” below the budget outlook.
Mr Bowen earlier told the hearing politicians and parties were submitting a record number of policies for costing.
In the first quarter of 2015/16, the office had already received 418 requests for independent costings of policies, which could be completed quicker with more resources, he said.
“If we had more resources we could do more,” he said.
“That is not a plea for resources … (but) that means that in juggling resources I have to ensure that I put sufficient resources onto the costing side of the work, which can mean our published work could suffer a bit.”
While published reports into government spending trends and other budget issues will not be scrapped altogether, they could take a little longer to produce than initially planned.
A major report into Medicare spending and cost pressures is due to be released within three weeks.