Hockey an optimist despite Costello gloom

Joe Hockey believes Australia has a bright future, despite a less than rosy forecast by his Liberal predecessor Peter Costello.

Mr Costello, Australia's longest-serving treasurer, has warned Australia's luck is beginning to run out as wages fall and consumer pessimism grows.

He said on Wednesday while Australia was "far" from recession, the economy was undergoing big changes, leaving people with a sense of uncertainty about the future.

But the man currently in charge of the nation's finances has a different view.

"I'm fundamentally an optimist. I think Australia is on the threshold of its greatest ever era," Treasurer Joe Hockey told ABC TV on Wednesday.

"But whatever prosperity we're going to have in the future, we're going to have to earn."

The Abbott government has struggled to pass some of its more contentious budget measures through the Senate, with Mr Hockey taking a personal thrashing in the polls from disgruntled voters.

He agreed there were some "hard measures" in the government's first budget but said they were necessary to ensure future generations were left better off.