Australian Prime Minister Tony Abbott may not have to use his threat to not allow MPs to have a Christmas break for failure to pass his party's legislative agenda. Reports said that the Liberals and the Greens have agreed to remove the federal limit on borrowing and to fund everyday services through the issue of more commonwealth bonds.

Treasurer Joe Hockey sought to increase the limit to $500 billion from $300 million, but Labor refused to agree, making the Coalition to seek the help of the Greens which negotiated the deal for days.

Greens leader Christine Milne signed a letter agreeing to the lifting of the debt ceiling to prevent a repeat of a stand-off over the debt, while the Coalition made a commitment to make available more information about the status of the commonwealth, particularly the amount of commonwealth debt due to a deficiency in tax collection and higher spending.

YouTube/The Australian Greens

Ms Milne also got the Coalition to agree to report in the budget on the impact of its climate change policy on the country's economy.

However, Mr Hockey avoided using words that would indicate the Coalition had entered into an alliance with the Greens - whom he described were prepared to engage in full and frank discussion on the issue - because the Liberals had previously attacked former Labor leader and PM Julia Gillard for forming an alliance with the pro-environment party in 2010.

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