Federal Treasurer Joe Hockey has introduced legislation into parliament to raise the national debt ceiling to half a trillion dollars.
Mr Hockey said he was presenting the bill "with regret".
"The previous government recognised that ultimately whoever was elected after the election would have to deal with this issue," he said.
The proposal before the lower house is to increase the debt ceiling, or allowable value of government bonds on issue, to $500 billion from $300 billion.
The current limit is expected to be reached on December 12, while Treasury advice to the government points to a peak in gross government debt above $400 billion by 2016.
Labor wants to amend the legislation to limit the cap to $400 billion in the absence of a "proper" explanation from the government on why it wants such a big increase.
The debt ceiling had been raised three times since 2008, when Labor was in power.
Mr Hockey said when in opposition, the coalition government had accepted the advice of the Australian Office of Financial Management (AOFM) and supported raising the debt limits.
But Labor, in concert with the Australian Greens, were now opposing a similar move - even though they caused the debt.
"It is Labor's debt, there is no excuse," Mr Hockey said.
The treasurer noted the debt ceiling was never raised under the former Howard coalition government because "we paid off the debt".
Mr Hockey challenged Labor's stance on his bill.
"This is a game that they are going to lose," he said.
Mr Hockey said the debt cap increase was not about running up more debt.
"We don't want to have to come back to this place and increase the debt level (again), we want to put it out of the way and get on with the job of paying it down," he added.
Mr Hockey said he hoped the domestic and world economies continued to get better, but he didn't know what lay ahead.
"We are being responsible," he said.
"Labor trashed the joint when they were in government and now they are trying to stop us from fixing it."
Mr Hockey said the debt cap increase was not about running up more debt.
"We don't want to have to come back to this place and increase the debt level(again), we want to put it out of the way and get on with the job of paying it down," added.
Mr Hockey said he hoped the domestic and world economies continued to get better, but he didn't know what lay ahead.
"We are being responsible," he said.
"Labor trashed the joint when they were in government and now they are trying to stop us from fixing it."
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