It was the distinction that defined the budget: good debt versus bad debt. We were told that good debt was borrowed for long-term investments meant to eventually pay off such as the Melbourne to Brisbane rail freight link and the Western Sydney Airport.
Bad debt was for the everything else - day-to-day expenses such as running schools and hospitals and paying pensions.
In reality it's not that simple, but assuming for a moment that it was, it's worth asking whether there is a way to turn "bad debt" into better debt.
Three decades ago in the office of the then education minister John Dawkins, an Australian National University academic came up with a way to do it that's been replicated the world over.
Dawkins had asked him to come up with a way to reintroduce university fees.
The ANU's Bruce Chapman didn't want to reintroduce fees, because it would put university out of the reach of people who couldn't afford it. So he came up with a scheme under which fees would return, but students would pay them with money lent to them by the government.
When, in the years after university, their income climbed beyond a certain point (originally set at average earnings) they would begin to make repayments, collected through the tax system.
The rate of interest would be the same as the rate of inflation. In other words, the 'real' rate of interest would be zero, meaning the amount owed wouldn't grow in real terms in the years before they began making payments.
People whose income never reached the threshold would never have to make repayments, which made sense because they wouldn't have used it to gain a financial benefit.
The loans were called "income contingent", because payments were contingent on income, and the idea can be used almost anywhere.
Why not make the support we give sports people income contingent? If they become spectacularly rich as a result, they can begin paying it back.
Why not make loans for the installation of solar panels income contingent? With fellow ANU academic and Nobel Prize winner Joseph Stiglitz he has edited a book outlining plans to spread the idea to all sorts of government payments, even payments to the government such as fines.
Why not impose really big fines and make the payments income contingent so that low earners paid what they could afford and high earners paid a lot more?
Suppose sudden unemployment threw a family into financial crisis. Stephen King, now a commissioner with the Productivity Commission, says a Higher Education Contribution-style loan could provide immediate help, with guaranteed repayment through the tax system when things pick up.
It would be cheaper than a Centrelink payment and much easier to obtain than a bank loan. Under the HECS-HELP higher education scheme, after the Turnbull government's latest changes, someone on $42,000 has to pay less than 1 per cent of their income on repayments, someone on $100,000 has to pay 7.5 per cent.
With Ric Simes, a director of Deloitte Access Economics, Chapman has suggested income-contingent loans for rural areas struggling economically.
Banks would lend some of the money, using their vetting mechanisms to ensure the money only went to businesses with a future, and the government would provide the rest, which would only be repaid when good times returned.
"If the government simply offered a grant to a project so that there was no need for the enterprise to put some of its own resources in jeopardy, there would be less incentive for the enterprise to succeed," they write.
The free-market Centre for Independent Studies wants them used for paid parental leave. Parents could get up to 26 weeks' income instead of the present 18, in the knowledge that the repayments would be taken out of their tax when they returned to work and earned enough. It's a cheap way to help people, but it's far from costless.
Twenty per cent of of all higher education loans, about $1.9 billion a year, are never repaid. In this year's budget the government cut the repayment threshold and extended the obligation to repay loans to Australians living overseas from July this year.
It will probably have to do more down the track by extending the repayment requirement to deceased estates despite the inevitable howls about a "death tax".
But even if many loans continue to go sour, getting 80 per cent of them repaid is a lot better than none at all. Which is why if we want to give more services to the people who need them most, more bad debt is likely to be turned into income-contingent loans owed to the Commonwealth.
Eryk Bagshaw is economics reporter. Ross Gittins is on leave.
