Treasurer Joe Hockey says Commonwealth debt limit being increased to $500 billion The Federal Government has announced a $200 billion increase to the Commonwealth debt ceiling and a six-month audit into Government spending in the face of a "deteriorating" budget position.
Treasurer Joe Hockey announced the measures after a federal Cabinet meeting in Canberra today.
"The Coalition government will have to increase the debt limit for Commonwealth Government securities to $500b," he said. "We are increasing it to that level because I've been advised that on 12 December, the current debt limit of $300b will be hit." He said the last Treasury assessment, provided in the pre-election fiscal outlook, predicted debt would peak at $370 billion.
However, recent trends show it will instead "exceed $400 billion".
Mr Hockey would not give any more details, saying only that the Treasury figures would be available in the Mid-Year Economic and Fiscal Outlook (MYEFO) due to be delivered before Christmas.
"We need to put it beyond any doubt and we do not want to have to revisit this issue again," he said, adding the Government needed to "move quickly" particularly in the wake of the recent US debt limit crisis. Opposition says Hockey asking for 'blank cheque' without releasing figures
Shadow Treasurer Chris Bowen has called on the government to release MYEFO as a "matter of urgency" given the size of the increase.
"What he's asking for is a blank cheque," he told PM.
"He's asking for a very big increase in the debt cap without releasing figures."
Mr Bowen conceded that some increase to the cap was "justified" and said the Opposition would take a "responsible" look at the issue when it came before parliament next month. Hockey says 'no restrictions' on what commission can recommend
The Opposition has also criticised the National Commission of Audit, announced today by Mr Hockey as crucial to helping the Abbott government "fix the budget".
"What matters is not the debt limit, it's the debt. And the level of the debt," the Treasurer said.
"You've got to have a credible plan to bring the debt down and that's what we're developing. That's why we're having the commission of audit."
The commission will assess the "scope, efficiency and functions" of the entire operations of the Federal Government, including the potential privatisation of Commonwealth assets.
"Every area of government will be examined. There are no restrictions," Mr Hockey said.
Finance Minister Matthias Cormann, who also announced the measures, said the commission would deliver an initial report by the end of January and give its final recommendations by the end of March.
"We have inherited from Labor a budget which continues to deteriorate," Senator Cormann said.
"The Government has to be able to live within its means on a sustainable basis over the long term and this is of course what the commission of audit has to help us achieve in a calm, methodical and orderly fashion."
Labor's spokesman Chris Bowen warned the tight timeframe pointed to imminent cuts.
"We're seeing a very tight timeframe - early reports over just a matter of months," he said.
"That indicates they will be cutting this term - they won't be going to the people to get a mandate for their cuts." Business Council head, former Howard minister among commission appointees
The commission will be chaired by Business Council of Australia president Tony Shepherd.
Four other commissioners have also been appointed: former Howard government minister Amanda Vanstone, chairman of the NSW Independent Pricing and Regulatory Tribunal Dr Peter Boxall, former Treasury Secretary Tony Cole and former WA senior bureaucrat Robert Fisher.
During the election campaign Prime Minister Tony Abbott promised the audit would not trigger any action "inconsistent with our mandate".
The Labor Party has previously slammed the plan as a "licence to cut" spending.
The last Commonwealth commission of audit was established by the incoming Howard government in 1996. http://www.abc.net.au/news/2013-10-22/joe-hockey-announces-commission-of-audit-details/5038314
