The Turnbull government will break through the country's former debt ceiling this week, breaching the $500 billion mark as it doubles the credit card bill it inherited from Labor.
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On Tuesday, gross Commonwealth debt reached more than $499 billion, after growing by more than $2 billion since Friday and $9 billion since early May.
The record level of debt has sparked calls from within the Turnbull government and the Senate crossbench to restore the formal debt limit abolished under a deal struck between the Coalition and the Greens in 2013.
Under current regulations, Treasurer Scott Morrison only has to request the Australian Office of Financial Management to raise the gross debt limit, the total face value of government securities on issue.
In May, Mr Morrison pre-empted the looming breach by ordering the Office of Financial Management to raise the gross debt level to $100 billion above the threshold set by former treasurer Joe Hockey.
In 2013, Mr Hockey justified increasing the ceiling to half-a-trillion dollars to move it "beyond any doubt".
But Mr Morrison faces authorising yet another increase before 2020 when the nation's debt hits $663 billion.
A spokeswoman for Mr Morrison said the increase was needed to support infrastructure and defence capability and to avoid drawing down on the Future Fund.
"From 2018 we will no longer be putting everyday expenses on the credit card," she said, referring to the government's plan to borrow for "good debt" such as infrastructure, while limiting borrowing for "bad debt" such as day-to-day services.
"That is what living within your means is all about."
She said the government had cut the growth in gross debt from 34 per cent under Labor to less than 10 per cent in the May budget.
One Nation senator Pauline Hanson called for the re-establishment of the formal legislation requirement, which could see a US-style temporary shutdown of government departments if new debt limits are not passed by Parliament.
"At this rate we will never be able to pay it back," Senator Hanson said. "We need to rein in our spending".
Ms Hanson took particular aim at the yearly public service executive remuneration of ABC managing director Michelle Guthrie [$900,000] and outgoing Australia Post CEO Ahmed Fahour [$5.6 million].
According to calculations by debt analyst and the manager of the Australian Debt Clock, David Lawson, total government debt is now rising by $5.3 million an hour, or $126 million a day.
Liberal Senator Dean Smith echoed Senator Hanson's calls for the re-establishment of a formal legislative debt limit.
"They are an important institutional mechanism," he said. "I would hope we absolutely get to the place where we can restore debt ceilings."
Liberal Senators James Paterson and Eric Abetz have also historically favoured re-introducing the formal debt limit.
Former Liberal Senator turned Australian Conservatives leader Cory Bernardi told the Senate it was "extraordinary the Treasurer was able to raise the nation's debt without justifying it to Parliament".
Gross debt will hit $725 billion in 2027-28, according to the budget documents, but by international standards, Australian government debt remains low.
The most relevant figure of net debt, gross debt minus the country's financial assets, currently sits at $300 billion or 20 per cent of GDP.
In 2016, Japan's net debt hit 130 per cent while France's grew to 90 per cent.
