Coalition to increase the debt ceiling to borrow more funds

THE Federal Government has announced a $200 billion increase to the Commonwealth debt ceiling and a six-month audit into Government spending in the face of a "deteriorating" budget position.

Treasurer Joe Hockey announced the measures after a federal Cabinet meeting in Canberra today.

"The Coalition government will have to increase the debt limit for Commonwealth Government securities to $500b," he said.

"We are increasing it to that level because I've been advised that on 12 December, the current debt limit of $300b will be hit."

He said the last Treasury assessment, provided in the pre-election fiscal outlook, predicted debt would peak at $370 billion.

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