Speaking at the party's Scenic South annual meeting in Dunedin, Dr Brash said Finance Minister Bill English had claimed the country's finances would be back in surplus by 2015 after this month reaching a record deficit of nearly $17 billion.
"That is not realistic. The Government needs to take some very tough decisions for that to happen," he told about 50 people.
Dr Brash also took a swipe at Prime Minister John Key, the man who replaced him as leader of the National Party.
Mr Key was being "irresponsible" by pretending the age of eligibility for New Zealand superannuation would not go up.
Everyone understood it would go up at some stage, Dr Brash said.
People in their 30s and 40s did not expect national superannuation to still be there when they reached retirement age.
"We can say it will be there but it might be 66 or 67 before you are entitled to it."
In a wide-ranging speech concentrating mainly on economics, Dr Brash compared the amount of New Zealand's total debt compared with GDP with that of countries such as Spain and Portugal.
This year, New Zealand would have $180 billion of net debt, 85% to 90% of GDP.
"We are one of the leading indebted countries in the world, up there with Portugal and Spain."
The last time New Zealand was in surplus was 1973 and, "tragically", the country would be in surplus briefly this year because of the damage caused in Christchurch by the earthquakes. Foreign money would flood in to pay for the rebuilding of the city.
"From July 1, we will be in deficit again and it will keep getting bigger for the next three or four years.
"Bill English keeps talking about the need to rebalance the economy away from domestic consumption and towards exports. We are doing that, but very slowly. That is the major concern for me."
Dr Brash, the former chairman of the 2025 Taskforce, said the gap between Australia and New Zealand continued to grow and there was no indication the Government was serious about doing anything about trying to catch Australia.
In the past 10 years, a net 280,000 New Zealanders had moved to Australia. And if New Zealand continued to grow as most agencies predicted, a further 410,000 New Zealanders would move to Australia by 2025.
Those were people who were skilled and highly qualified, and could readily move and get good jobs in Sydney and Melbourne, he said.
Australia did have abundant minerals but a report in the late 1990s by the World Bank found New Zealand had the second-highest amount of resources per capita in the world.
Those resources included fishing, fresh water, geothermal energy and resources other than oil, gas and coal.
"We are not a resource poor country. We are resource rich, even if we choose not to use them."
Dr Brash was asked by former Act MP Gerry Eckhoff what the party's bottom line was when it came to any confidence-and-supply agreement with a future National-led government.
While pointing out the party had to ensure enough people voted for Act in the November 26 election to be in a position from which to negotiate, Dr Brash said he had so many things he wanted to change that it was hard to select one.
However, when pushed he said the Resource Management Act was a major impediment to progress.
The country could not afford to have a long, drawn-out expensive process when it came to getting approval to build or expand businesses, or even to build a house.
"We want to protect the environment but it shouldn't take months of delays for a straightforward process." Forcing local government to consult the community and Maori was another impediment, he said.
In the English language, that sentence could only mean Maori were seen as not being part of the community, and having local government talking separately to iwi on RMA matters was "outrageous".
The new policy protecting biodiversity meant that to clear a paddock of scrub, if that scrub was native, a farmer had to consult local government and the tangata whenua, Dr Brash said.
