"We should not be panicked into financial profligacy and the burdening of future generations of Australians with huge amounts of debt." Mr Howard said it took 10 years for Australia to repay $96 billion in federal debt left when his government came to office.

"We can only contemplate the length of time needed to liquidate the $200 billion of debt at the very least our nation now faces as a consequence of recent policy decisions," he said. "Malcolm Turnbull and his colleagues were absolutely right to oppose the government's stimulus package. "It needlessly plunges Australia deeply into debt with a poorly-targeted spending spree."

Spending measures should be reduced but be targeted to removing obstacles for employers to hire new staff as the crisis progresses, Mr Howard said. Opposition Leader Malcolm Turnbull, who spoke after Mr Howard, said generations of Australians would carry the burden of Mr Rudd's package, which he said he would fear would place Australia far further into debt than the projected $200 billion.

"We have great challenges ahead of us but we have at the head of the country a prime minister that is firing off all his ammunition in the first moments of the battle," he said. "If and when economic circumstances get harder and tougher, how much will he spend... $200 million could become $300 million or more. "It may not just be our children that are paying off this debt, but our children's children."

Mr Howard also used the speech, the first in a series of annual speeches named by the Menzies Research Institute in his honour, to urge Mr Rudd not to dismantle WorkChoices legislation. "If, as appears certain, the Rudd government proceeds to dismantle not only our industrial relations changes but also take the country back in the area of industrial relations to conditions obtained 20 years ago, then that will be the first occasion in a generation that an Australian prime minister has turned his back on a significant economic reform," he said.

"That will send a very bad signal to the rest of the world about this country's appetite for continuing economic reform." AAP