The man who headed the Abbott government's commission of audit, Tony Shepherd, has suggested the family home should be included in the pension assets test to counter a budget drain from retiring baby boomers.

Key points: Including family home in the pension assets test "may have to be done" to repair budget

Including family home in the pension assets test "may have to be done" to repair budget "We do risk a genuine crisis unless we can get growth going again": Shepherd

"We do risk a genuine crisis unless we can get growth going again": Shepherd AAA credit rating at risk unless agencies are convinced of "path back to surplus"

The prominent business leader and company director is warning that future generations stand to suffer as "self-interested" baby boomers cash in on entitlements by using the aged pension to fund their retirements.

In a report for the Liberal Party-linked Menzies Research Centre, Mr Shepherd said including the family home in the pension assets test might be necessary to prevent "a real bubble" in the cost of social welfare.

"It is an option and one that we originally proposed over a certain value. I think that's just one example of the sort of things that may have to be done," Mr Shepherd told the ABC's AM program.

"I think the average Australian regards that [access to the aged pension] as just, so what? It doesn't impact on me so [they] just keep going.

"With an ageing population that is creating a real bubble in the terms of the cost of aged pension and aged care."

Now is the time to act 'while things aren't too bad'

The warning from Mr Shepherd, a former Business Council president, comes as Treasurer Scott Morrison considers hard decisions for the May 9 budget.

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Mr Shepherd stopped short of saying Australia would become a "banana republic" if hard budget decisions were shelved.

"Banana republic might be too tough," Mr Shepherd said.

"But I think we do risk a genuine crisis unless we can get growth going again, unless we can get growth in real wages going again, unless we can get more permanent and real jobs going again.

"The time to act is now while we're reasonably strong and things at least on the surface aren't too bad."

Mr Shepherd said without budget repair, social welfare entitlements including Medicare and the NDIS might need to be trimmed.

"All those things will suffer. They may not be cut, but they certainly won't grow," Mr Shepherd said.

"When the economy is down … the lower quintile in the economy always suffers the most."

Mr Shepherd also warned that Australia's prized AAA credit rating will continue to be at risk unless they see evidence of budget repair.

"Unless they are convinced that we have a path back to a budget surplus then I think that is a real risk," Mr Shepherd said.

Mr Shepherd also defended the Federal Government's campaign to cut the company tax rate over 10 years from 30 per cent to 25 per cent.

"The feeling is that companies are ripping them [taxpayers] off, that they're not paying their taxes," he said.

"So we have to get these myths off the table that are being perpetuated."

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