Australia planning to boost debt ceiling to $486B

Oct 23, 2013, 12:21 AM EDT
Tall ships sail in front of the iconic Opera House in Sydney Harbour on October 3, 2013, on the eve of the International Fleet Review.
AFP/Getty Images

CANBERRA, Australia (AP) — The Australian government plans to raise the nation's debt ceiling by a whopping two-thirds to 500 billion Australian dollars ($486 billion) in a bid to avoid any future Washington-style political crisis over spending.

The conservative government, elected last month, said Tuesday latest data showed that debt was on track to reach the current AU$300 billion ceiling in December.

While the previous center-left Labor Party government had forecast debt to peak at AU$370 billion in 2015-16, new data showed it would exceed AU$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 Corp. late Tuesday.

A 16-day partial U.S. government shutdown ended last week when Congress approved a budget that keeps the government running through Jan. 15 and lets the Treasury continue to pay its bills through Feb. 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 Nov. 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.