The federal government has succeeded in rushing through laws to increase Australia’s national debt ceiling by $200 billion, with the government ignoring Labor’s push for a smaller increase.
However, Treasurer Joe Hockey faces a more difficult task in getting his laws through the Senate, where Labor and the Greens have the numbers to force amendments to halve the increase.
The laws that cleared the lower house on Wednesday allow the government to increase the debt ceiling, or allowable value of government bonds on issue, to $500 billion, up from the old $300 billion limit.
Treasury’s pre-election budget update said the $300 limit would be reached by December this year, and would rise to around $370 billion by July 2016.
The higher debt ceiling laws were the first bill passed by the new parliament, with Mr Hockey blaming the previous Labor government for running up massive debt and for forcing parliament to extend Australia’s national credit card limit.
“It is Labor’s debt, there is no excuse,” Mr Hockey said.
“The previous government recognised that ultimately whoever was elected after the election would have to deal with this issue.”
The treasurer noted the debt ceiling was never increased under the former Howard coalition government because “we paid off the debt”.
The Commonwealth Inscribed Stock Amendment Bill 2013 passed, a win for the federal government that wanted them passed by the lower house by the end of the day.
The Senate will start debate the debt limit on Thursday in what is shaping up as the first test of the new government’s ability to pass its legislative program.
Shadow Treasurer Chris Bowen said the opposition was happy to increase the limit to $400 billion, but the government had come “nowhere near close” to justifying the amount it wanted.
He accused Mr Hockey of hypocrisy, and said the coalition in the Senate had voted against similar moves when Labor increased the debt limit to $300 billion in May 2012.
“We will not tolerate for one second the member for North Sydney (Mr Hockey) lecturing us about why we must vote to increases in the debt cap when he did not vote for one, instructing his senators not to vote for one just a little over 12 months ago,” Mr Bowen said.
Shadow assistant treasurer Andrew Leigh noted the lower house had allowed just 70 minutes of debate for a $200 billion measure – or $47 million per second.
“Every second of this debate that elapses, the debt limit will rise $2 for every single Australian,” he said.
But Prime Minister Tony Abbott told ABC television Labor’s proposed amendments would not provide enough of a buffer to cover the existing debt forecasts, adding that former treasurer Wayne Swan had previously urged parliament to provide a buffer of up to $60 billion.
“This is Labor’s debt. We have always been critical of Labor’s addiction to debt and deficit,” he said, adding the government wanted to make sure it never had to ask for another increase,” he said.
Mr Abbott offered a confidential briefing for Opposition Leader Bill Shorten with Treasury Secretary Martin Parkinson, but said update budget figures would not be released until the mid-year budget review, due in mid December.