Dire budget deficits for years to come and stalling productivity growth are painting a bleak economic picture. 

Against this backdrop, a new policy idea has emerged: if Australia can't rely on productivity growth and tax reform to fix the budget blackhole, what about means-testing wealth? 

Peter Harris is the former chair of the Productivity Commission and now board director at the Policy Institute Australia.

He told Jacob Greber, for this week's Insiders On Background, means testing wealth - including the family home - for paid parental leave, aged care, pensions and childcare could fix the budget blackhole.