Federal Budget 2017: Australia retains credit rating after budget
AUSTRALIA has kept its AAA credit rating after the Budget, but Standard and Poor’s has warned we could lose that coveted status within two years.
AUSTRALIA has kept its AAA credit rating in the wake of the 2017 Budget.
All three major credit ratings agencies have now confirmed Australia’s investment status will remain at AAA.
Standard and Poor’s confirmed it would keep the rate on hold today, although it has kept the country’s credit rating on a negative watch.
The rating’s agency issued a warning to the Turnbull Government that Australia could lose its coveted rating within two years if the agency lost confidence that the Budget could return to surplus by 2021.
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In a statement today, S & P said a budget surplus could be “elusive” given the current make up of the Senate and the time it has already taken the government to repair the Budget since the Global Financial Crisis.
S & P changed its outlook to negative for the first time in July last year.
Today it said if the Turnbull Government did manage its projected return to surplus by 2021 “it would come more than 10 years after the global recession pushed the central government budget into deficit”.
“This substantial delay in fiscal repair, and the risk of further delay, raises our doubt over the ability of the Australian government to meet its fiscal objectives,” it said.
The agency also questioned the Turnbull Government’s ability to pass savings measures through the upper house.
“This dynamic, which could continue, presents further downside risk to the outlook for fiscal balance,” it said.
“We therefore continue to think that budget surpluses could remain elusive beyond fiscal 2021.”
Originally published as Federal Budget 2017: Australia retains credit rating after budget