JERIN MATHEW ibtimes.co.uk Australia's government is increasing the country's debt limit by two thirds to avoid a potential fiscal crisis in the future, as it is projected to reach the current debt ceiling by the end of 2013. Treasurer Joe Hockey said after a federal Cabinet meeting in Canberra on 22 October that the country will increase its debt limit by A$200bn (US$193bn, £120bn, €141bn) to A$500bn. Australia is projected to reach its current A$300bn ceiling in December. "The Coalition Government will have to increase the debt limit for Commonwealth government securities to $500bn," said Hockey. "We are increasing it to that level because I've been advised that on December 12, the current debt limit of $300bn will be hit." He said the country's debt had been expected to peak at A$370bn, but recent trends revealed it will exceed A$400bn. "The debt limit needs to be set so as to provide sufficient headroom to ensure there is stability and certainty for the financial markets about the government's capacity to finance its operations for the foreseeable future," Hockey said. "We need not look any further than the recent events in the United States to realise how imperative stability and certainty is for confidence." Earlier in October, the US faced a partial government shutdown for 16 days after the Democrats and Republicans failed to reach an agreement on the country's budget and raising its debt-ceiling.
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