Scott Morrison has warned keeping wage subsidies and other coronavirus economic supports in place for too long will damage the super-charged growth Australia needs to escape the crisis.
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The prime minister has also conceded there will be more jobs lost and businesses collapse once those supports are wound back.
"We will seek to do all we can, as we have with the unprecedented support, but I'm not going to make false promises to the Australian people," Mr Morrison told parliament on Monday.
"We have cushioned the blow but we can't prevent the blow."
His government is rethinking its fiscal strategy as it faces record deficits in the current financial year and next because of the high spending and large hit to revenues associated with the recession.
In particular, spending on the JobKeeper wage subsidies, boosts to business cashflow, and the increased JobSeeker unemployment benefit have to be carefully examined.
There would always be plenty of people happy to make the case for spending more and for longer.
"But it is not a wise or responsible course," Mr Morrison told the Committee for Economic Development of Australia's State of the Nation forum earlier in the day.
"Left in place for too long, not only will that damage the capacity of the budget to deal with important essential services, but it will also dull the dynamism of the economy and prevent the adjustments that must necessarily take place to enable new jobs to be created and our economy to move forward."
Economic growth will have to lift by a full percentage point above trend just to get back by 2025 to where Australia was before the virus hit.
Mr Morrison used the speech to further flesh out his plans for boosting this growth, including bringing forward smaller but "shovel-ready" infrastructure projects and pushing more deregulation.
National cabinet has already been discussing how to move to "single-touch approvals" that could combine commonwealth and state-level environmental processes.
Joint assessment teams will work on accelerating 15 priority infrastructure projects worth more than $72 billion in public and private investment.
These include the inland rail project from Melbourne to Brisbane; the Marinus undersea electricity link between Tasmania and Victoria; the Olympic Dam extension in South Australia; emergency town water projects in NSW; and road, rail and iron ore projects in Western Australia.
Another $1.5 billion will go to smaller projects, including half a billion for road safety upgrades.
Mr Morrison is also bringing the government's deregulation task force into his own department.
Shadow treasurer Jim Chalmers said the speech appeared to be more about satisfying the prime minister's political objectives.
"When hundreds of thousands are joining the jobless queues it makes no economic sense to snap back to austerity at the same time as he pretends his priority is growth," he told AAP.
Australian Associated Press
