The report comes with a recommendation that the state's taxation system be reformed to increase rates of revenue growth.

The report assessed revenue and expenditure projections over 15 years from 2019-20 across four scenarios - three of which showed the state could attract billions of dollars in increased net operating balance deficits, fiscal balance deficits and net debt.

It said all scenarios were manageable in the short to medium-term. "However, for most scenarios, the size of the corrective action required to maintain fiscal sustainability increases significantly over the projection period," the report said.

"The rates of revenue growth required to maintain long-term fiscal sustainability are unlikely to be delivered through expected growth in current revenue sources or minor changes to existing taxation arrangements."

It said corrective policy actions needed to be implemented sooner rather than later.

Under historical trends, the report showed health expenditure could grow to account for 42.1 per cent of general government expenditure.

Treasurer Peter Gutwein (pictured) said forecast surpluses over the forward estimates would enable the government to respond to future cost pressures, particularly within health services, and unforeseen events.

He said the report confirmed why $450 million in savings within government departments over the budget forward estimates needed to be made. "The Hodgman majority Liberal Government is living within its means and spending less than we earn," he said.

Labor's finance spokesman David O'Byrne said the report was "a cry for help from Treasury".

He said Labor in government would prioritise health spending to ensure all services were well-supported.

Mr O'Byrne would not say whether Labor or the government should consider new state-based taxes but said he was open to a review of state taxation.