Australia plans to raise the country’s debt limit by two-thirds to allay concerns it could face a future fiscal crisis.

The newly-elected conservative government is looking to raise the borrowing limit to A$500 billion ($486 billion).

Australia is forecast to reach its current A$300 billion ceiling in December.

Treasurer Joe Hockey said that he wanted to avoid a crisis similar to the recent US fiscal emergency.

“The debt limit needs to be set so as to provide sufficient headroom to ensure there is stability and certainty for the financial markets about the government’s capacity to finance its operations for the foreseeable future,” Joe Hockey said.

“We need not look any further than the recent events in the United States to realize how imperative for stability and certainty is for confidence.”

Treasurer Joe Hockey said that by raising Australia’s debt limit he wanted to avoid a crisis similar to the recent US fiscal emergency

Earlier this month, the US government was partially shutdown for 16 days after the Democrats and Republicans were unable to reach an agreement over the country’s budget and raising the debt ceiling.

The situation was resolved last week after Congress hammered together a last-minute deal to temporarily raise the debt limit until the end of the first week of February 2014.

However, financial markets were rattled by the US political deadlock, which brought the country closer to the possibility of defaulting on its debts.

There was little reaction in the Australian financial markets to Tuesday’s announcement.

Australian government debt is popular among many investors because of its top AAA credit rating.

That means it is regarded as the safest kind of investment by the ratings agencies looking at the risks associated with government borrowing, as well as for companies.

At the same time, Australia’s total debt, expressed as a percentage of its total economic output (GDP), is relatively low compared to other developed nations.

According to the International Monetary Fund (IMF), Australia’s debt is expected to be around 30% of its GDP this year, compared to nearly 106% for the US.

Joe Hockey said that the government was keen to keep its debt levels in check.

“We are not going to allow ourselves to get into the position that the United States is in where there’s tremendous uncertainty about the capacity of a country to live within its means,” he told the Australian Broadcasting Corporation.

Australian PM Tony Abbott is set to hold his first parliament sittings in late October, which will give the government up to six weeks to pass the legislation required to raise the debt limit.

The government is also set to face an audit commissioned by the Treasury, which is aimed at streamlining government services and reducing wasteful spending.

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