Debt leaves you exposed: Treasury boss

New Treasury boss John Fraser has an old fashioned view of debt.

He doesn't like it.

He saw what happened in earlier times when interest rates shot up and the massive servicing of government debt swallowed up money that could have been spent better elsewhere.

"I'm old fashioned, I don't like public debt," Mr Fraser told a Senate estimates hearing in Canberra on Wednesday.

"Public debt leaves you liable."

His worry at the moment is the average cost of servicing government debt - estimated to be about $370 billion - is about three per cent per annum.

"When interest rates go up, that debt will go up with it. That is where we are exposed," Mr Fraser said.