Australian government clinches deal to scrap debt ceiling

Australia's Treasurer Joe Hockey (above) struck a deal with the Greens on Wednesday, Dec 4, 2013, to scrap the government's debt ceiling a week before the A$300 billion (S$343.4 billion) limit is breached. -- FILE PHOTO: AFP
Australia's Treasurer Joe Hockey (above) struck a deal with the Greens on Wednesday, Dec 4, 2013, to scrap the government's debt ceiling a week before the A$300 billion (S$343.4 billion) limit is breached. -- FILE PHOTO: AFP

SYDNEY (REUTERS) - Australia's Treasurer Joe Hockey struck a deal with the Greens on Wednesday to scrap the government's debt ceiling a week before the A$300 billion (S$343.4 billion) limit is breached.

The agreement would see the government provide comprehensive debt reporting in its annual budget papers, mid-year updates and pre-election reports.

The government will also include details of spending on climate change.

Green's Leader Christine Milne said it was a good outcome.

Last month, the government had sought to increase the ceiling by A$200 billion, but was knocked back by the upper house Senate.

The opposition Labor Party had preferred a smaller A$100 billion increase, while the Greens, which hold the balance of power in the Senate, wanted the ceiling scrapped.

Unlike in the United States, there was never any real concern about the debt ceiling with many market players expecting the issue would be resolved one way or another.

The debt ceiling was introduced by the former Labor government back in 2008 and has been raised several times without much drama.