The Australian government hiked its debt borrowing limit by two-thirds in a bid to alleviate concerns over a fiscal crisis.
The moves comes just after U.S. Congress thrashed out a last-minute deal to raise its $17 trillion debt limit last week, following a 16-day partial government shutdown and fears that the world's largest economy could default on its debt.
(Read more: Australian Treasurer: US shutdown has taught us a lesson )
According to an official statement from Australian Treasurer Joe Hockey, the government was likely to meet its AUD $300 billion (US $292 billion) debt ceiling in December, with peak debt on track to exceed AUD $400 billion (US $389 billion).
To allow for this rise in debt, and with the objective of having a AUD $40-60 billion buffer to protect against any unanticipated events with a fiscal impact, the Commonwealth Government debt limit will be hiked to AUD $500 billion (US $487 billion), he said.
Hockey said the move was designed to avoid U.S.-style debt ceiling crisis.
(Read more: Yoshikami: The DC drama is just beginning )
"We need not look any further than the recent events in the United States to realize how imperative stability and certainty is for confidence," read his statement.
"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," he added.
(Read more: A rally down under: Are Aussie stocks unstoppable? )
The development attracted attention on social media site Twitter, as commentators contrasted Australia's relatively small debt ceiling with the U.S.'s $17 trillion debt pile.
Some tweeters even referred to the debt limit as 'adorable.'
Australia's government debt enjoys a triple-A credit rating, and its bonds are often viewed as one of the safest investments worldwide.
-By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie
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