Treasurer Joe Hockey has set his own debt limit, quietly giving his department unprecedented permission to borrow up to half a trillion dollars to meet government commitments.
It comes despite Parliament voting to abolish the debt cap late last year, following a political stand-off with Labor and last-minute deal wit the Greens in the Senate.
The approval, granted in December and officially gazetted on January 22, means the Commonwealth Treasury can issue stock and securities to raise total liabilities to a value of $500 billion at any time until April, 2024.
"I direct that the maximum total face value of stock and securities that may be on issue is $500 billion," Mr Hockey stipulated.
Initial confusion over the revelation was explained by Mr Hockey's office as merely the Treasurer doing what he had originally sought to do which was give his department the scope to make necessary borrowings - but not beyond $500 billion.
His office advised that despite scrapping the legislated credit card limit, the department still needed the Treasurer's specific imprimatur for any new borrowings.
Mr Hockey's approval expires on April 1, 2024.
The mid-year economic and fiscal outlook document (MYEFO) released in December, forecast debt to climb from a current quantum of just over $300 billion in 2013/14 to as high as $460 billion by 2016/17.
Mr Hockey also cited Treasury forecasts that without a change of policy, burgeoning outlays and declining revenues would require even greater borrowings sending commonwealth debt to $667 billion ten years from now.
Treasury's capital raisings are catered for under the somewhat opaquely named "Commonwealth Inscribed Stock Act 1911".
The CIS Act had been amended to impose a legislative limit on the face value of Government stock and securities on issue, initially with the imposition of a$75 billion maximum under the former Labor government.
This limit was adjusted up in a series of subsequent hikes as the GFC-related stimulus spending meant more money was required.
However MYEFO noted that even before the legislative limit was imposed, it had been a requirement that the Treasurer approve any expansion of the funding envelope.
"On 10 December 2013, the CIS Act was amended to remove the legislative debt limit," the documents states.
"The CIS Act still requires the Treasurer to issue a direction stipulating the maximum face value of relevant stock and securities that may be on issue. On 11 December 2013, the Treasurer directed that the maximum face value of relevant stock and securities that may be on issue is $500 billion."
The story Joe Hockey sets unprecedented debt limit for his own department first appeared on The Sydney Morning Herald.