Scott Morrison makes last-ditch bid to save Australia’s AAA credit rating

EXCLUSIVE: TREASURER Scott Morrison will break down Australia’s debt bomb by allocating it to important infrastructure projects in each department.

• AGENCIES COULD DECIDE AAA RATING BY CHRISTMAS

TREASURER Scott Morrison will break down Australia’s debt bomb by allocating it to important infrastructure projects in each department.

The move is a last-ditch bid to prevent our AAA credit rating being downgraded before Christmas, as the Turnbull government deals with a deteriorating budget bottom line.

Mr Morrison is expected to announce today a return to surplus will be delayed beyond the promised 2020-21 timing, with net debt growing from May’s $326 billion forecast.

The Daily Telegraph understands he plans a major restructure of government debt, apportioning it to each department, where it can be allocated against major economy-boosting spends.

This will work towards reassuring credit agencies of Australia’s strong economic management, where “good debt” is being used to fund infrastructure and other projects to create jobs and boost the economy.

Federal Treasurer Scott Morrison. Picture: Jack Tran

The Treasurer will blame Labor for risking the economy by failing to pass budget measures when he releases today’s mid-year economic and fiscal outlook. “Bill Shorten and Labor are engaged in active and cynical budget sabotage, with an eye to the political benefit they believe they will receive from promoting chaos,” he said.

“There does remain an air of unreality about the scale of the fiscal challenges we face as a nation and the preparedness of the parliament to support the government’s efforts to restore the budget to balance.”

Cabinet has been warned a ratings downgrade could lead to higher interest rates.

Australia has maintained its rating since November 2011 and a downgrade would be the first since 1989. If the rating does drop, Labor will step up its political attack.

Labor finance spokesman Jim Chalmers said the government could save the AAA rating by ditching plans to “give $50 billion to big business” and adopting Labor’s plans to change negative gearing and capital gains.

Finance Minister Mathias Cormann said commodity prices had lifted but not enough to offset falls in revenue.

Originally published as Scott Morrison makes last-ditch bid to save Australia’s AAA credit rating