Last night Parliamentarians passed the Government Loans Amendment Act 2013, allowing for the Government?s authorized debt ceiling to raise from $1.45 billion to $2.5 billion. The raise does not mean the Government intends to immediately borrow this amount, it means it is legally permissible to. The bill still has to go to the Senate before it is finalized.
The Debt ceiling, or Legislated Limit, as it is called in the annual accounts has been raised before. In 2004 the limit was $250,000,000, in 2006 it went up to $375,000,000, in 2009 it was raised to $1,000,000,000, in 2011 it went up to $1,250,000,000, and in 2012 it was raised to $1,450,000,000.
In his recent budget statement, Finance Minister Bob Richards said, ?In view of the forecast operating deficit, not only for the year under consideration, but for those forecast in the medium term plan, this authorized ceiling must be raised.
?It is the view of this Government that what has become the annual ritual of ratcheting up the debt ceiling gives the impression that there is indeed no debt management plan at all. This is a negative insofar as capital markets are concerned, the same entities we rely on to finance this debt.
?Therefore, we will be laying legislation, for the approval by Parliament, to raise the authorized debt ceiling to $2.5 billion. It is important to note that this only authorizes the limit of Government borrowing, it does not prescribe the actual amount of borrowing.
?We do not expect the borrowing requirement to take us to that level, but we want a level that is pragmatic, realistic and static. The only adjustment to this ceiling I would like to see is an eventual downward adjustment.?
Category: All, News, Politics
Source: http://bernews.com/2013/03/debt-ceiling-raised-from-1-45b-to-2-5b/
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