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Debt limit raised -

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EMMA ALBERICI, PRESENTER: The Commonwealth's debt is heading towards $500 billion. The Treasurer has announced he will increase the nation's credit limit before the end of the year to avoid a US style budget crisis. But at the same time Joe Hockey's released details of his plan to get the nation back into the black. A new commission of audit will identify savings and spending cuts.

JAMES GLENDAY, REPORTER: The Federal Government's on track to hit its debt ceiling just weeks before Christmas. So to avoid the possibility of a default, the Treasurer is going to do what he once railed against - jack up the nation's debt limit.

JOE HOCKEY, TREASURER: We need to move quickly to deal with this, particularly in the wake of what has been revealed in the US in recent times.

JAMES GLENDAY: It's a big increase too. The ceiling will be raised from $300 billion to $500 billion. The Government says that will give it a buffer when debt peaks at more than $400 billion.

The Opposition wants to see the latest budget figures before the proposal goes to Parliament.

TONY BURKE, OPPOSITION FINANCE SPOKESMAN: I don't think many Australians would have predicted that the same people who had claimed that debt was a massive problem in Australia, who had claimed that there was a budget emergency, were then going to stand up and say "By the way, Australia's debt levels should be allowed to go to $500 billion."

JOE HOCKEY: Well what matters is not the debt limit, it's the debt and the level of the debt. And you've got to have a credible plan to bring the debt down.

JAMES GLENDAY: This is the man in charge of that plan. Business chief Tony Shepherd will chair a wide ranging audit commission. He's got just three months to find some structural savings.

JAMES GLENDAY: Nothing is off limits and there will be cuts. A final report is due ahead of the next Budget.

MATHIAS CORMANN, FINANCE MINISTER: We did inherit a budget in very bad shape. We do need to deal with it in a calm, methodical and orderly fashion from here on in.

JAMES GLENDAY: The language and short time frame for the review has public sector unions deeply worried.

NADINE FLOOD, COMMUNITY AND PUBLIC SECTOR UNION: Clearly it suggests there's already a shopping list of cuts that this razor gang will be eyeing off.

JAMES GLENDAY: The man who headed the last commission of audit in 1996 says the Government needs to be prepared for the political backlash.

BOB OFFICER, AUDIT CHAIRMAN: The Government is better to do it early in its term than to do it later when some of the harshness of the early implementation of a change in direction perhaps is realised.

JAMES GLENDAY: The ACT's likely to bear the brunt of any major cuts.

KATY GALLAGHER, ACT CHEIF MINISTER: Canberra is already in the grip of uncertainty about what the plans are and the sooner they are resolved and information given the better. There's no doubt we're facing job losses in this town.

JAMES GLENDAY: But for today at least those worries were put to one side, as the local Parliament passed the nation's first gay marriage laws.

ANDREW BARR, ACT CHEIF MINISTER: I want to wish all of those couples who formalised their relationships together under this law, long and happy lives together.

JAMES GLENDAY: The Liberals voted against the proposal.

JEREMY HANSON, ACT OPPOSITION LEADER: We do not see the ACT Assembly as a vehicle to drive national agencies.

JAMES GLENDAY: But people began popping the question almost as soon as it passed.

Weddings can take place from December, though the celebrations may be short lived. The Federal Government will challenge the laws in the High Court and today announced it wants the case expedited.

KATY GALLAGHER: My expectation is they will move within days and then it's over to the High Court to schedule a hearing.

JAMES GLENDAY: If this law is struck out what happens then s that it for ACT legislating in this area?

KATY GALLAGHER: This issue isn't going to go away, even if it struck out of the ACT statute book. This is about people, the campaign is well under foot, the community's moved on. It's up to politicians really to keep pace with the community.

JAMES GLENDAY: Constitutional lawyers say the arguments of both the ACT and Federal Governments have merit and the High Court case could go either way. A decision isn't expected until next year.

Meanwhile the former Prime Minister, John Howard, has urged his party not to include rank and file members in leadership ballots.

He told an audience in Adelaide Labor's recent internal campaign will have revitalised the party's base.

JOHN HOWARD, FORMER PRIME MINISTER: But that having been said, I think the new system is a long term mistake for the Labor Party and I hope and pray that the Liberal Party will not be tempted ever to mimic it.

JAMES GLENDAY: Mr Howard says the results of similar leadership ballots in other countries have been mixed and he says it may eventually force Labor to pick a weaker leader.