Prime Minister Tony Abbott believes that if the Labor opposition wants to put its "shameful fiscal history" behind them, it should allow the government to raise the debt ceiling to $500 billion from $300 billion.
Labor has said it will only support an increase to $400 billion in the absence of evidence that a greater increase is needed, demanding the immediate release of the mid-year budget review.
Treasurer Joe Hockey has promised to release the mid-year economic and fiscal outlook, which will update the forecasts for the 2013/14 budget, before Christmas.
"The last thing the Labor party should be threatening is the kind of stand off in parliament we have seen in other countries over this kind of issue," Mr Abbott told reporters on Tuesday in reference to last month's US political gridlock over debt in Washington.
He said Treasury advice, based on the "mess we have inherited from Labor", is that gross commonwealth government debt will peak "significantly" in excess for $400 billion by 2016.
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During the election campaign, Treasury forecast debt reaching $300 billion by next month and peaking at $370 billion in 2015/16.
Mr Abbott said the only way to be absolutely confident the parliament will never have to deal with this issue again is by raising the limit to $500 billion.
"Let the repair squad get in and fix Labor's mess," Mr Abbott said.
He said the coalition was always prepared to support this kind of legislation when Labor was in government.
But Opposition Leader Bill Shorten disagreed, saying Hansard shows the coalition in opposition attacked increasing the debt cap "with every inch of their being".
"They won the election, that's fair. What they didn't win in the election is the right to run up debt like a drunken sailor and simply say 'trust us and we'll be back later to tell you what is going on'," Mr Shorten told reporters in Canberra.
"We want to see the detail, we want to see what we are buying."
The Australian Greens are unlikely to support a higher debt limit without further information about how the extra money will be spent - especially when the government also wants to cut off revenue sources by abolishing the carbon and mining taxes.
"(But) We are glad Joe Hockey has come around to the Greens' way of thinking and understands that not all debt is bad," Greens Deputy Leader Adam Bandt told reporters.
Independent senator Nick Xenophon wants to know where the money will go.
"If we're spending debt on infrastructure that builds up the economy ... then that's one thing," he said.
"But if we're blowing it on silly projects, then we need to be very mindful."
Newly-elected billionaire MP Clive Palmer criticised the treasurer for saying before the election he wanted to bring debt down but moving afterward to increase the debt limit.
"It's not because he's a bad guy - it's because they don't know what to do," he told reporters.
