The most recent figures show that in August government borrowing stood at £18.3bn. The government is paying £8.8bn on its debt – the highest level since records began in 1997.
Badenoch said her party would reduce borrowing by finding £70bn of savings, including through cuts to the welfare bill.
Under her party’s “golden economic rule”, half of the savings would go towards reducing the deficit.
“Cuts are never easy, but they are much easier to accept if what you are doing is fair,” she said.
“Fair to taxpayers, fair to future generations, and fair to those who really do need support.”
The Conservatives have recently announced they would scrap inheritance tax on family homes and allow couples to leave £1m tax-free.
The party has also pledged to scrap a rule that sees parents in England earning more than £100,000 a year lose out on childcare support.
Asked if the Conservatives were the party for the rich, Badenoch told the BBC her policies would “help everyone”.
“Quite frankly, getting people off welfare is doing something for them… the best welfare is a well-paying job,” she said.
Pressed on whether she would make changes to the triple lock to reduce the amount spent on pensions, Badenoch said she did not want to see “pensioner poverty” and that there were other things the party could do to grow the economy.
The trade unions and the Liberal Democrats have urged the government to raise money by putting a windfall tax on banks, who have reported large profits in recent years.
Badenoch dismissed this suggestion, arguing it would hit bank shareholders, including people’s pension funds.
Setting out her party’s policy Liberal Democrat leader Daisy Cooper said: “It’s outrageous that while households have been grappling with the cost-of-living crisis, the big banks have benefited from a taxpayer-funded windfall worth billions.”
She said the money raised from putting higher taxes on the bank could go towards reducing the cost of petrol and diesel and transport fares.
Responding to Badenoch’s speech, Phillipson said: “Under the Tories debt rocketed, interest rates went up, while family finances and businesses were hammered.
“Labour has taken the fair decisions to reverse the Conservatives’ decline. The economy is growing, interest rates have fallen, and private investment has returned.
“We’re giving people breathing space on the cost of living and delivering everyday fixes to make life that little bit easier.”
