THE head of the Treasury, Martin Parkinson, has raised the prospect of new taxes on presently-untaxed activities, saying the days of big budget surpluses are gone forever.

In a sombre assessment of the tax position - the second in a fortnight from a senior Treasury official - Dr Parkinson said Australia would soon be unable to meet demands for new government spending from its existing taxes.

"The public will need to make thoughful decisions" ... Treasury Secretary Martin Parkinson. Credit:Andrew Meares

"These are expected to deliver less revenue as a proportion of GDP, given capital and labour will become more mobile and the costs of securing that revenue will increase," he told the Committee for the Economic Development of Australia.

"In addition, greater use of the tax bases we currently rely most heavily on - personal and corporate income tax - can adversely impact on productivity, participation and investment if not designed well."