The Australian federal government will increase the debt limit to 500 billion AU dollars (about 482 billion U.S. dollars), Treasurer Joe Hockey announced here on Tuesday.
"I announce today that the Coalition Government will have to increase the debt limit for Commonwealth Government securities to 500 billion AU dollars," he said. "We are increasing it to that level because I've been advised that on Dec. 12, the current debt limit of 300 billion AU dollars (almost 289.46 billion U.S. dollars) will be hit."
According to Hockey, the existing cap of 300 billion will be reached by Dec. 12.
Hockey said there needed to be stability and certainty for the financial markets about the government's capacity to finance its operations for the foreseeable future.
"We need not look any further than the recent events in the United States to realize how imperative for stability and certainty is for confidence," he said.
Hockey told reporters in Canberra that peak debt on current trends will now exceed 400 billion AU dollars (almost 386 billion U.S. dollars) by 2015/16 up from the 370 billion AU dollars ( almost 357 billion U.S. dollars) forecast before the Sept. 7 election. "We need to move quickly to deal with this," he said.
In addition, he also announced some details of the National Commission of Audit to assess "the role and scope" of government and its spending.
The commission, a coalition election promise, will provide an initial report to government before the end of January, and its final report will feed into next year's budget process.