Federal Treasurer Joe Hockey has raised the prospect of a US-style government shutdown, warning there will have to be "massive" spending cuts if the Opposition does not back down on increasing the debt ceiling.

The Government wants to raise the debt cap to half a trillion dollars, but Labor and the Greens have joined forces in the Senate to amend the plan and impose a lower limit of $400 billion.

The amended legislation will now return to the Lower House, but Mr Hockey has already indicated he will not accept the change.

He has warned Labor it will be responsible for any cuts and will have to wear them "like a crown of thorns".

"There is no choice," he told Radio National's Breakfast program.

"If Labor prevents an increase in the debt limit, there is no choice but to start having massive cuts to government expenditure because the Government is running on borrowed money - that's what we inherited."

The standoff must be resolved by December 12 when the current debt limit of $300 billion is set to be reached.

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The most recent Treasury figures, released before the election, had forecast debt peaking at $370 billion by 2015-16.

Hockey 'behaving like a B-grade actor'

Reprising Labor's argument from its time in office, Mr Hockey says the Government also needs a buffer of between $40 billion and $60 billion.

But the Opposition wants the Treasurer to release his department's budget update, the Mid-year Economic and Fiscal Outlook (MYEFO), before it will approve any more than $400 billion.

Labor's Treasury spokesman Chris Bowen says Mr Hockey is "behaving like a B-grade actor trying to confect this crisis".

"This is a Liberal Party which campaigned to bring down the debt," he told RN Breakfast.

"They want to increase the debt cap by 67 per cent - $200 billion - and they haven't justified it.

"They should release their economic statement and until they do it, we would only approve an increase of $100 billion, which is more than enough - certainly to get them through this year."

Labor 'playing a game of Russian roulette'

Mr Hockey told Parliament last night the Opposition was "playing a game of Russian roulette".

"But what they don't understand in relation to debt limits is that the barrel is fully loaded," he said.

"And if they choose to pull the trigger, there's only one outcome for them.

"But the problem is there will be ancillary pain for the Australian people."

Mr Bowen reiterated that a $100 billion increase should be more than enough.

"Nobody wants to see a standoff and a crisis like they saw in the United States, and we wouldn't let that happen," he said this morning.

But the Opposition has rejected the Government's offer of a Treasury briefing, saying the Australian people deserve to know the details of the budget.