Most Australians will be dead before the nation’s debt is paid off, former treasurer Peter Costello has told ABC’s 7.30.

On the eve of the federal budget, Mr Costello said national debt as a proportion of the GDP, 19 per cent, was at about the same level as when he became treasurer in 1996.

“It took us 10 surplus budgets to pay it off last time. You’d be doing well to pay it off in 10 surplus budgets this time,” he said.

“If I may say so Leigh, I think the probabilities are we’ll never get back to where we were. You and I will die before that happens.”

‘Individuals paying high taxes haven’t had tax relief for years’

The budget is expected to include tax cuts for low and middle-income earners. The government has also said it will stick with its company tax plan.

Mr Costello described people earning between $100,000 and $200,000 as “forgotten people” and said the Liberal Party should remember individuals paying high taxes had not had “any tax relief for 10 years”.

“This is the point that I find curious. Banks and big companies pay tax at 30 per cent, individuals pay tax at 47 per cent. You pay tax at 47 per cent if you’re on $200,000. A bank or a big company only pays it at 30 [per cent] on $1 million,” he said.

“It’s all very well for business to argue its case for tax cuts, and tax cuts are always good for the economy. But somebody’s got to speak for the individual wage and salary earner as well.

“And I think the Liberal Party ought to remember them. These are people paying 47 cents on $200,000, they’re paying 39 [cents] on $100,000. They’re paying higher than the corporate rate.

“They haven’t had any tax relief for 10 years. And I think those forgotten people, those people that don’t have organised lobbyists to speak for them, also ought to be in the calculation of the government at the moment.”

Royal commission ‘should look at banking regulator’

Mr Costello also took aim at banking regulators, saying he hopes they come under the glare of the banking royal commission.

“It’s all very well to say, ‘Oh the banks behaved badly, or whatever’. We did have a regulator that was supposed to be looking into all of this,” he said.

“I hope before the royal commission is finished people have a look at what the regulator was doing during this period as well.

“Just because you’re there doesn’t mean you’re actively enforcing your duties in the way that you should.”

-ABC