THE HON JOE HOCKEY
THE HON ANDREW ROBB AO
Shadow Minister for Finance, Deregulation and Debt Reduction
LABOR MUST NOT LIFT $250 BILLION
DEBT CEILING BY STEALTH
The Coalition today calls on the government to rule out using the Budget Appropriations Bills to raise the $250 billion Commonwealth debt ceiling by stealth.
Wayne Swan must confirm if the government is planning to again lift his record debt limit and if so commit to presenting any proposal to the parliament as a standalone piece of legislation for a proper debate and a specific vote.
Last year the government buried their proposal to lift the debt ceiling from $200 billion to $250 billion in the Appropriation Bills, thereby denying the parliament this opportunity. The limit was previously raised by Labor from $75 billion to $200 billion less than two years earlier.
Current gross debt factored towards the debt ceiling stands at $224.2 billion and the government is continuing to borrow an average of $100 million per day.
Given this government’s unprecedented levels of spending and borrowing the current debt ceiling could be reached within months.
Labor’s burgeoning debt is the elephant in the room and given its dreadful track record the government must not be given a blank cheque.
Tomorrow night’s budget must also contain:
· A comprehensive statement outlining the current status of Labor’s underlying structural deficit.
· Detailed sensitivity analysis which highlights the budget’s vulnerability to declines in the terms of trade and commodity prices.
The government has locked in billions of dollars in spending that relies on the continuation of record terms of trade to sustain.
If the terms of trade come off, the spending commitments remain hence the structural deficit.
A more full-blown modelling analysis of the economic and budget impacts of falls in the terms of trade – say of 15 and 25 per cent – would be a prudent and should be a feature of the budget.