A deal on debt, as government announces business leaders who will have its ear

Joe Hockey has negotiated a deal with The Greens. AAP/Daniel Munoz

The government today clinched a deal with the Greens to scrap the debt ceiling, in exchange for undertaking to provide detailed information and schedule regular parliamentary debates on the subject.

The agreement broke an impasse over the Coalition’s attempt to raise the ceiling from $300 billion to $500 billion, which was opposed by Labor and Greens. The debt level is on the brink of hitting $300 billion.

Parliamentary debates on government debt will occur at least twice a year, and more often if debt is increasing by $50 billion or more. There will be a Debt Statement published in every budget, every Mid-Year Economic and Fiscal Outlook and every pre-election fiscal outlook.

Treasurer Joe Hockey said the limit “was an artificial construct”. Greens leader Christine Milne said “This … will return some maturity to the debate around debt”.

Meanwhile, Tony Abbott tonight announced the appointment of a who’s who of the big end of town to the government’s Business Advisory Council.

The council, whose chairman Maurice Newman was named earlier, will meet three times a year with senior government members and includes leaders from the manufacturing, resources, logistics, retail, financial and construction sectors.

Members are Jac Nasser, chairman of BHP Billiton; Michael Chaney, chairman of the National Australia Bank; Catherine Livingstone, chairman of Telstra; Solly Lew, chairman of Premier Investments; Peter Fox, executive chairman of Fox Group Holdings; Daniel Grollo, CEO Grocon; Graham Kraehe, chairman of BlueScope and Brambles; Jane Wilson, a medical specialist and company director; Gary Banks, former head of the Productivity Commission; Barry Irvin, head of Bega Cheese, and John Hart, head of Restaurant and Catering Australia.

Speaking to the Business Council of Australia’s 30th anniversary dinner tonight, Abbott said the Business Advisory Council “will be more than capable of guiding, encouraging and, where necessary, warning the new government”.

Abbott also announced that draft terms of reference for the review of competition laws and policy had been provided to the states. This was the first big review of the area since the Hilmer inquiry two decades ago.

The review will examine not only present laws but “the broader competition framework, to increase productivity and efficiency in markets, drive benefits to ease cost of living pressures and raise living standards for all Australians”.

Earlier, the release of the latest national accounts showed a sluggish rate of growth.

In the September quarter, the economy grew by just 0.6 per cent, with annual growth running at 2.3 per cent to the end of September, which is significantly below the trend rate.

Hockey said there had been a further deterioration in the budget bottom line. “The fact is the economy is stuck in second gear,” he said. The government had inherited “below trend growth, rising unemployment and a deteriorating budget.”

Abbott reassured his business audience that he intended to be a reformer but appealed for patience. “Make no mistake: this government is determined to be a reforming one, in the tradition of the Hawke and Howard governments. But we will be pragmatic reformers rather than ideological ones.

"Good government does what it can today so that it can get what it wants tomorrow”.

Abbott said that “Australia will be quite different in a few years’ time because a Coalition rather than a Labor government has been calling the shots, and calling them with a preference for freedom. Still, in a stable, peaceful, pluralist democracy few things change dramatically overnight, nor should they.

"In our own way and in our own time, we too will be a reforming government and our country will be much the better for it.”