In November 2013, the newly elected Coalition government sought to increase Australia's debt ceiling from $300 billion to $500 billion, representing a $200 billion increase [1].
Treasurer Joe Hockey warned that without the increase, Australia could face a "US-style government shutdown" and "massive cuts to government expenditure" [1].
While the Coalition initially requested a $200 billion increase, the ultimate outcome was the **complete abolition of the debt ceiling** in December 2013 through a deal with the Greens [2][3].
The claim omits several critical facts:
1. **The debt ceiling was abolished, not just raised**: Following Labor and Greens opposition to the $500 billion limit, the Coalition struck a deal with the Greens to completely scrap the debt ceiling legislation in December 2013 [2][3].
The final outcome was not a raised ceiling but no ceiling at all.
2. **The Coalition inherited the debt position**: Hockey explicitly stated the government was "running on borrowed money - that's what we inherited" from the previous Labor government [1].
Treasury forecasts from before the election had predicted debt peaking at $370 billion by 2015-16 [1].
3. **Economists supported abolition**: Many leading economists argued "there is no practical need for an artificial limit on government borrowing" and warned that political brinkmanship risked Australia's AAA credit rating [2].
Greens leader Christine Milne called the debt ceiling debate "a silly debate" [2].
4. **Labor's position changed in opposition**: Labor had previously raised the debt ceiling multiple times when in government (from $75 billion in 2009 to $200 billion, then $250 billion, then $300 billion), but now opposed the Coalition's proposed increase to $500 billion, offering only $400 billion instead [1][4].
ABC News is generally considered politically neutral, though like all media organizations, it has faced various accusations of bias from different political perspectives over time.
The debt ceiling was actually **introduced by the Labor government in 2009** under Treasurer Wayne Swan at $75 billion [4].
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Labor subsequently raised it multiple times:
- From $75 billion to $200 billion (2009)
- From $200 billion to $250 billion
- From $250 billion to $300 billion (December 2011)
Labor's own increases totaled $225 billion in cumulative raises when they were in government [4].
When the Coalition sought to raise it further to $500 billion, Labor (now in opposition) opposed the full increase, offering only $400 billion instead [1][2].
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This demonstrates that **raising the debt ceiling was standard practice across both parties** when in government, with each side criticizing the other for doing so when in opposition.
While the Coalition did seek a substantial $200 billion increase (from $300B to $500B), several factors provide important context:
**Legitimate rationale**: The Coalition argued the increase was necessary to avoid a US-style government shutdown, with the $300 billion limit set to be breached by December 12, 2013 [1].
They cited Treasury forecasts showing debt peaking at $370 billion by 2015-16, requiring headroom plus a $40-60 billion buffer [1].
**Inherited situation**: The debt position was largely inherited from Labor, which had already increased the ceiling multiple times [1][4].
The Coalition was managing pre-existing commitments and revenue shortfalls.
**Economist consensus**: Many economists supported abolishing the ceiling entirely, arguing it served no practical purpose and created unnecessary political risk to Australia's credit rating [2][3].
The final outcome (abolition) aligned with expert opinion.
**Bipartisan hypocrisy**: Both parties have raised the debt ceiling when in government and criticized such increases when in opposition.
Labor's opposition to the Coalition's increase was politically convenient but inconsistent with their own record of multiple increases [1][4].
**Transparency safeguards**: In exchange for Greens support to abolish the ceiling, the government agreed to enhanced transparency requirements, including explaining to Parliament if debt increases by more than $50 billion [2].
However, the claim presents this as a standalone negative action without explaining:
- The debt ceiling was ultimately abolished, not raised
- The debt position was inherited from Labor
- Both parties have routinely raised the ceiling when in government
- Economists widely supported abolition
- The alternative was a potential government shutdown
The framing implies fiscal irresponsibility unique to the Coalition, when in reality this was standard practice across governments of both persuasions.
However, the claim presents this as a standalone negative action without explaining:
- The debt ceiling was ultimately abolished, not raised
- The debt position was inherited from Labor
- Both parties have routinely raised the ceiling when in government
- Economists widely supported abolition
- The alternative was a potential government shutdown
The framing implies fiscal irresponsibility unique to the Coalition, when in reality this was standard practice across governments of both persuasions.