Hockey ready to tackle Labor's debt

Joe Hockey concedes a coalition government would face a mountainous job paying down Labor's debt. Source: AAP

SHADOW treasurer Joe Hockey concedes a coalition government would face a mountainous job paying down Labor's debt.

But if opinion polls are correct and the coalition romps into government on Saturday, one of his first tasks as treasurer would be to legislate to increase the $300 billion debt ceiling.

This is because the budget under Labor deteriorated by $33 billion in 11 weeks between the May budget and early August, and that means the ceiling looks set to be breached before Christmas.

"It's not something we want to do ... (but) you cannot leave the markets in an uncertain position about the management of the debt," Mr Hockey told reporters in Melbourne.

The coalition says it will improve the budget bottom line by $6 billion over the next four years, while paying off $16 billion of debt.

Mr Hockey concedes that paying off Labor's debt can't happen overnight.

"This is a mountain to climb," he said.

Opposition Leader Tony Abbott said a Labor government would just keep "maxing out" the national credit card.

"What we need to do is to turn this around from a situation where we are constantly living beyond our means, to a situation where we start living within our means, paying back the debt," he said.

Former Labor treasurer Wayne Swan responded by asking 'If Labor was spending too much, what were the coalition going to cut?'

"If they are elected they are going to have a 'commission of cuts' to hack into health and education," Mr Swan told reporters in his Queensland seat of Lilley, referring to the coalition's planned commission of audit into government expenditure.

Treasurer Chris Bowen continued his attack on the coalition's costings, released on Thursday, saying the inadequate documents had "holes all over the place".

The policies include scrapping the carbon and mining taxes, reducing growth in foreign aid, implementing a more generous paid parental leave scheme and massive road-building funding.

"This is a squib of a document, this is dodgy maths," he told ABC radio on Friday.

But former Liberal treasurer Peter Costello believes Australians have already made up their minds who they will vote for.

"People are going to decide, really, on whether they think this government's been a good government or a bad government," he told the Nine Network.

"Most people have made up their minds and I don't think they'll be worrying too much about costings in the last 24 hours."

HSBC Australia economists said the coalition's costings suggest there is little difference between the main parties' budget bottom lines, despite their different proposed approaches, in particular over mining and carbon taxes.

Commonwealth Securities chief economist Craig James said the best result on Saturday will be a clear election result.

"Removal of uncertainty is important for investors, businesses and consumers," Mr James said in a note to clients.

"There are good reasons to expect a stronger Australian economy once the election uncertainty is resolved."

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