“Until we get our spending under control we are not going to be able to pay down our debt.” – Peter Costello

It was great to see Treasurer Scott Morrison putting a 23.9 per cent cap on taxes yesterday.

That means that as a proportion of the economy, a Coalition government will take no more of our money beyond this figure.

I’m not saying taxes should not be lower but recognising they should not go higher is a good start.

But sadly, there is no such cap on spending. Perhaps that will be announced tonight in Morrison's budget speech.

Spending sits at around 25 per cent of Gross Domestic Product as our debt rockets along towards $700 billion.

Debt currently sits north of $500 billion and there is no plan by either side of politics to pay it off.

As former Treasurer Peter Costello told Leigh Sales on ABC1’s 7:30 last night, “you and I will be dead before that happens”.

That was a sobering political moment and it has jammed a stick in the spokes of the wheel of the government as it tries to sell tonight's budget.

The spin needed a reality check.

Why does debt matter?

As Costello said, it matters when our nation hits troubled economic waters.

In 2008 when the global financial crisis hit, there was no government debt. Australia went from zero debt to 20pc as a result of the GFC.

If another GFC hit we could go from 20pc to 40pc and that would be disastrous.

In short, we are exposed because government spending is not under control.

There is no cap on government spending and there is no debt ceiling.

Debt also matters because we have a moral obligation not to steal from the next generation to finance our lifestyle.

One of the reasons Australian Conservatives is working so hard to win Senate seats at the next election is because the Senate cross bench has often refused to pass savings measures to reduce debt.

The Senate cross-bench has also backed spending on the NDIS and the NBN.

These measures may be nice but there are question marks about whether or not government should be doing them in the first place.

Both have had massive cost blow-outs and the NBN is unlikely to ever deliver a commercial return to the taxpayer.

The same is likely for the second Sydney airport and the inland rail.

There is an argument for these projects being undertaken by government but there is no argument for not counting their cost on the nation’s balance sheet.

Again, neither of these projects are likely to produce a commercial return and government should just be honest about this. We don’t need creative accounting to hide their fiscal impact.

As for Snowy 2.0, this is another big government initiative that has already blown out in cost.

Without the government interference in the energy market by way of green subsidies pricing out our abundant and clean coal, this project would not have gotten a look in.

The budget contains small tax cuts for low and middle income earners but again, as Peter Costello pointed out, single income families on $100,000 per year are not exactly wealthy yet they are paying 39 cents tax in the dollar.

Companies only pay 36 and that is a very high rate by world standards.

“Tax cuts are always good for the economy,” Costello says.

Someone should tell that to Labor and the Greens.

While the Liberal and National parties have no policy for a debt ceiling, Australian Conservatives do.

But under our current trajectory, it won’t be just Peter Costello and Leigh Sales’ lifetimes that continue to struggle with debt, it will be our children’s children’s.