The government's promised tax cuts may need to be wound back as the nation's finances face what former Reserve Bank of Australia governor Bernie Fraser describes as a "reckoning" to deal with an explosion in budget deficits and public sector debt that could reach $1.5 trillion.

Prime Minister Scott Morrison has spent $194 billion on stimulus measures to fight the economic impact of the coronavirus, including a $130 billion wage subsidy package announced on Monday. Economists have generally welcomed the response but forecast the government's plan to be net-debt free by 2030 is now highly unlikely, with some MPs resigned to dealing with an "inter-generational debt" transfer lasting decades.

Mr Fraser, who was Reserve Bank governor during Australia's last recession in 1991, predicted there would be a "reckoning" for a swathe of government policies - including tax cuts - as the economy comes to grips with "an awful overhang of debt".

He said the cost of the government's support packages, the equivalent of the entire annual defence, education and health budgets combined, would mean the government would have to re-examine policies it had already legislated.