The debt ceiling farce might be drawing to a close, with shadow Treasurer, Chris Bowen, offering to support the $200 billion increase in the debt ceiling (to $500 billion), provided the Government agrees to release updated forecasts to justify the need for the higher debt limit than Labor/Greens proposed $100 billion increase (to $400 billion). From The Australian:
Opposition Treasury spokesman Chris Bowen wrote to Mr Hockey yesterday to repeat the argument for a $400bn cap, but also outline one way to support a higher limit. “The opposition also remains ready to vote for an increase in the debt limit to $500bn, if such an increase is supported by revised net debt figures in the mid-year economic forecast or in another form of update that you choose to publicly release,” he said. He agreed the debt cap would ideally cover projected increases in debt over the forward estimates…
Government sources would not indicate the likely response to Mr Bowen’s offer last night, and an impasse remains possible when parliament returns on December 2 as government debt is on track to breach the current $300bn limit by December 12.
As noted previously, the debate over increasing the debt ceiling by $100 billion (the Labor/Greens proposal) or by $200 billion (the Government’s proposal), is about who “owns” the federal debt. After spending five years lambasting Labor over the deteriorating Budget, and promising to restore order once they took office, the last thing the Coalition wants to do is go cap in hand back to Parliament prior to the next Federal Election and seek another extension. If they do this, the increase in debt will be viewed as their fault, and they will have broken one of their key election pledges.
However, given the opposition from the Coalition when the former Labor Government sought to increase the debt limit, Labor does not want to hand the Government a free pass. It’s pay back time.
This government on election night declared that “the adults were back in charge”. Rather than letting the existing ceiling of $300 billion be reached by 12 December, creating a potential US-style shutdown of government services, it should either release the updated forecasts to Labor and the Greens, and get their desired $200 billion increase in the limit, or accept Labor/Greens lower offer of a $400 billion ceiling, and get on with the job of running the country.
Allowing government services to be shut-down and damaging Australia’s reputation for sound government in the process, all for the sake of political point scoring, is not an option.
