I recently spent 18 months travelling around the world and came to the conclusion. There's no better country in the world that I've been too that a "average Joe" is better off then Australia.
When I was stacking shelves at Kmart they were paying me $23/hour unlimited hours as a second job. Same job in the States at Walmart pays $6/hour, casual come in whenever they feel like it. I worked as a casual Croupier in Darwin casino(5 years ago) and was getting $32/hour, worked the same job in Vancouver for $10.75(+$7/hour tips). Cost of living ain't alot cheaper in Vancouver ether.
Sure, our shirts are expensive but I'd rather pay a bit extra and know the workers can feed themselves unlike the guy in the US who approached me in his work uniform and asked for a dollar so he could take a "cheap" $1 menu burger home for his kid. Yep we pay $2-3 for the exact same burger but the maccas worker goes home and can feed his kids in Australia unlike his US counterpart.
Finally about our debt, there's two types of debt. Good debt and bad debt. Same for your household, same for the country. If the debt is for a appreciating asset that will provide an income higher then the cost of debt, it's a good debt. Think your homeloan, broadband network, infrastructure.
If it's a depreciating asset that losses money than it's bad debt. Think car loan, baby bonus and charter flights to aboriginal communities.
All the government needs to do is make sure that we're not borrowing to pay for bad debt items. Other than that who cares how much "in debt" we are. I have a massive investment property loan yet I sleep well, so should our government.