Peter Costello has given the Turnbull government's latest budget the nod of approval, saying it is is now on a believable path to a surplus.
The formal Liberal treasurer had issued a grim warning before the budget was handed down last week, saying many Australians will be dead before the nation pays off its debt.
"The good thing about the budget is it now shows a believable path to balance surplus," Mr Costello told AAP after delivering a speech in Sydney on Monday.
Mr Costello, the last treasurer to deliver a surplus 10 years ago, said it will probably take another decade of surpluses to get rid of the nation's debt.
But he questioned whether the country and its politicians have the appetite to run surplus budgets for a decade?
"The consequences if we don't are we will just be more exposed when we go into the next financial downturn," he told a budget briefing at the Centre for Independent Studies.
Treasurer Scott Morrison's third budget forecast the budget returning the black a year earlier than previously expected, while putting a seven-year personal income tax cut package at its centre.
Mr Costello backed the plan that will increase the tax threshold and reduce the number of tax rates while capping tax to 23.9 per cent of GDP.
"What we should try and do is get some agreement about capping expenses, and then if our revenue and our expenses are the same then we won't be running a deficit and we won't be building up debt," he said.
His only concern is that the final stage of the tax plan does not occur until 2024, two general elections away and too far away to be sure how the economy will be performing.
"Does somebody want to tell me what iron ore prices will be in 2024 because if you know tell me, I will go and buy some futures contracts and make an absolute killing," he joked.
The three-stage tax reductions initially assist low and medium-income earners, but the latter stages aimed at higher income earners have already been opposed by Labor, the Greens and Pauline Hanson's One Nation.
Labor has said it would support the first stage while its leader Bill Shorten in his budget reply speech said it would effectively double it in government.
But Mr Morrison has repeatedly rejected the idea of splitting the plan.
"What I find amazing about the Labor Party is they're happy to commit the Australian taxpayer to spending off into the never-never, but they're not prepared to actually go into the parliament and vote for tax relief for all Australians into the future," Mr Morrison told reporters in Brisbane.