There is no budget crisis: Martin Parkinson

The former Treasury secretary Martin Parkinson, in his first interview since leaving his job in December, says there isn't and never was a fiscal crisis.

He described the damagingly simple focus on budget surpluses and deficits as a fixation.

"Australia has fantastic opportunities in front of it, the shift of economic weight towards our region, the technological changes, if we grasp them," he told the Australian Financial Review's Laura Tingle.

"How do we go about grasping it? Well first of all, we've got to get our house in order. That means we've got to get our fiscal situation sorted out.

"It's not a crisis, it's never been a crisis. The last thing you'd want to do is start racing back to surplus in the next couple of years: the economy is growing below trend and will continue to do so."

He warned as long as Australia fails to get its budgetary house in order, it remains vulnerable to another shock like the global financial crisis.

"We could get hit at any point with another external shock. If we start from where our debt position is, it won't take very long for us to end up with debt levels that are dramatically higher than we've experienced in modern Australia," he said, adding Ireland's debt position "wasn't a lot different from Australia's" before the GFC.

"I don't envisage we will have to do that, but situations can change and change quickly, so that is why you want to err on the side of caution – get the place to a stronger fiscal position. You don't panic and try to do it in the next couple of years, but over a sustained period. At the moment we are looking at a decade of deficits."