As budget day draws closer, the language about the extent of any crisis or emergency is getting stronger by the day.

But are the ratcheted-up warnings from Tony Abbott and Joe Hockey about hard economic times ahead little more than political rhetoric?

Professor Raja Junankar of the Australian Business School at the University of New South Wales is boldly asking, "Crisis? What crisis?"

He says talk in recent days of a looming economic crisis is a myth that defies the health of the Australian economy, especially when compared to other developed economies around the world.

"I think the present Government and previous government have just been beating up the idea of a budget crisis," Professor Junankar told the ABC's AM program.

"If we compare ourselves to the OECD countries [other advanced economies], we are doing fantastically well in all sorts of ways."

The ever-sceptical professor, who has authored a new paper on how Australia weathered the global financial downturn, does not even agree a budget "emergency" is approaching.

"I don't think so at all. What we have is an economy which is doing pretty well compared to most OECD countries," he said.

"We have a country where the debt-to-GDP ratio is very small compared to almost all OECD countries, and we have an economy which is slowing down because we've done very well throughout the so-called global crisis, and it's now slowed down a little bit because China's economy has slowed down."

No immediate crisis

Professor Junankar believes the rhetoric and jargon is being exaggerated for political purposes.

He remains unconvinced that without prudent action now, there may well be a crisis in years to come.

"If there's a world crisis, of course, then we might have problems. I don't think there's any question that if the Chinese economy collapses and the European union collapses that we would have problems," Professor Junankar said.

"We don't have to suddenly close all the hatches and say 'crisis, crisis, we have to stop doing everything, cut back on all our welfare programs' - which is what the Government is trying to do.

"It is just a political stunt to try and persuade people that we have to cut back on things that this Government would like to cut back on anyway."

Professor Junankar agrees the budget will feel pain from the wind-down of the investment phase of the resources boom, but he doubts that is enough for the Government to be concerned about revenue from mining tax receipts.

"I don't think so. I think the real problem that Australia has is that our productivity growth has slowed down, and I think that is of course important," he said.

"But one of the factors that people don't look at very much is that, if you look at the share of wages in GDP, that has been going down consistently for about two decades now, and that means that profit share has been going up and inequality has been increasing as a result.

"And that means that people don't have as much for consumption purposes that they might otherwise have."

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Not surprisingly, Professor Junankar believes the Prime Minister's commitment to a paid parental leave is incongruous with talk of a budget emergency, and the need to review programs such as the planned disability insurance scheme.

"I don't think the parental paid leave is a good idea - we're trying to subsidise people who are at the top end of the [income] distribution, and I don't think that is necessary," he argued.

"The NDIS was a bipartisan policy and everyone said we should support that. And I think we can pay for those things in the longer run - not today, but in the longer run - by appropriate taxes which would collect more revenue."

Professor Junankar's latest paper looks at lessons learned from the global financial crisis and a construction of macroeconomic theories on how economic crises can be dealt with.

Follow Peter Ryan on Twitter @peter_f_ryan and on his Main Street blog.