Lenore Taylor, political editor theguardian.com
Tuesday 12 November 2013
Treasurer wants to talk compromise with Labor party and Greens to push through his controversial debt ceiling increase
Christopher Pyne, Joe Hockey, Julie Bishop, Warren Truss and Tony Abbott are sworn in during the opening of the 44th parliament at Parliament House on Tuesday. Photograph: Daniel Munoz/AAP
The treasurer, Joe Hockey, is being forced to negotiate a compromise with the ALP or the Greens over the government's demand for a $200bn increase to the government's borrowing limit before the end of the year, as the Abbott government faces the reality of a hostile Senate at least until next July.
As the Abbott government was formally sworn in on Tuesday, its highest legislative priorities – the carbon tax repeal and the increase in the debt ceiling – faced a rocky path through the Senate as the Greens leader, Christine Milne, backed Labor's concerns about the size of the proposed increase in allowable borrowings.
Australia is set to exceed its allowable debt ceiling by the end of the year and Hockey is demanding the increased ceiling be passed as quickly as possible.
A spokeswoman for Hockey said the government was "seeking talks" with other parties – indicating the debt ceiling issue would become an early political test both for the new government and the opposition parties.
"When Labor tried to raise the debt ceiling by $50bn, Tony Abbott behaved like the Tea Party in the United States, he carried on a treat about budget emergencies and debt crises and specifically he said 'the government should be forced to specifically justify this … our money, our future is too important to be mortgaged like this without the government giving us the strongest possible arguments for it because every dollar they borrow has to be repaid'," Milne told the ABC.
Her remarks followed Labor's decision to oppose Hockey's proposal to raise the debt ceiling from $300bn to $500bn, calling for a compromise figure of $400bn and the release of the mid-year economic forecast to explain why the increase was needed.
"Australians aren't able to get new mortgages or credit cards without submitting their personal financial information for scrutiny, so it's a bit rich for Mr Hockey to take the public credit card to half a trillion dollars without updated budget estimates," Bowen said.
"He's asking Australians to blindly tick off a $200bn increase in the nation's credit card limit without showing them why."
Milne agreed Australians should hear "justification for this $200bn increase to the debt ceiling … Labor has suggested a $100bn increase could be justified … we'll have a look at that."
A spokeswoman for Hockey said even under calculations done when Labor was in office, Australia's debt ceiling would have exceeded $400bn, because Australia's debt was predicted to hit $370bn by the end of the year and former treasurer Wayne Swan had himself argued that a $40bn to $60bn buffer was needed above predicted peak debt levels.
Labor and the Greens have also said they will vote against the eight carbon tax repeal bills which the Abbott government will introduce on Wednesday as its first item of legislative business.
In the new Senate, which sits from July, the government is likely to need the votes of six out of eight crossbenchers, with the outcome still somewhat unclear because of the possibility of a new Senate poll in Western Australia.
Despite his demands to raise the debt ceiling and Indonesian resistance to central elements of his asylum policy, including the turning back of boats, Abbott said on Tuesday the parliament had "great work to do: to secure our borders, to balance our budget, to strengthen our economy, to the relief of families and for the protection of jobs".
Joe Hockey forced to negotiate over $200bn boost to borrowing limit | World news | theguardian.com
