The Australian government plans to raise the nation’s debt ceiling by a whopping two-thirds to A$500 billion (US$486 billion) in a bid to avoid any future Washington-style political crisis over spending.
The conservative government, elected last month, said on Tuesday latest data showed that debt was on track to reach the current A$300 billion ceiling in December.
While the previous centre-left Labor Party government had forecast debt to peak at A$370 billion in 2015-16, new data showed it would exceed A$400 billion that year due to falling tax revenues.
“We are not going to allow ourselves to get into the position that the United States is in where there’s tremendous uncertainty about the capacity of a country to live within its means,” Treasurer Joe Hockey told Australian Broadcasting Corporation late on Tuesday.
A 16-day partial US government shutdown ended last week when Congress approved a budget that keeps the government running through January 15 and lets the treasury continue to pay its bills until February 7. But a repeat of the economically-damaging political stalemate and the threat of a default on the national debt could be repeated in the New Year.
“The thing that undermines market confidence and business confidence is when the government says: ‘we will not exceed a certain level of debt” and then keeps going back to the parliament or back to the congress to get it lifted,” Hockey told ABC on Wednesday.
“What we want to do is be in a position where we only do this once to fix up the mess that we inherited and then get on with the job of making sure that we start to live within our means,” he added.
A bill to increase the borrowing limit will go to parliament when it sits on November 12 for the first time since the government changed.
Opposition finance spokesman Tony Burke said Labor wanted to see the latest budget projections before voting on the bill. The opposition would deal with the debt ceiling legislation “responsibly,” Burke said.