Confirmation of Australia’s AAA credit rating by Standard and Poor’s today backs in the Albanese Government’s responsible economic management in challenging times.
The international ratings agency also upgraded Australia’s fiscal assessment score from 2 to 1 in recognition of the sound budgetary outlook.
This is a strong endorsement of the Albanese Government’s Budget and economic plan.
S&P has recognised Australia’s improving budget balance, spending restraint and reforms to sustain economic growth.
The report highlights the economy’s strong fundamentals, including our historically low unemployment and the good prices we’re getting for what we sell to the world. This – along with the beginnings of wages growth after a decade of stagnant wages – are reasons to be optimistic about our economy’s future despite the challenging global environment.
Australia’s strengthening fiscal position is a result of our responsible fiscal management which returned the majority of revenue upgrades to the budget while restraining growth in spending.
Our first budget in October began the hard yards of fiscal repair. We returned 99 per cent of the upward tax revisions for the next two years to the budget when the inflation challenge is most severe, and 92 per cent over the forward estimates.
This compares to around 40 per cent under the former government.
The Government’s spending discipline means payments are forecast to fall in real terms over the next two years. Real spending growth is expected to average just 0.3 per cent per year over the forward estimates.
This fiscal discipline is all about putting the budget on a more sustainable footing and addressing the inflation challenge in our economy. We want to avoid putting upward pressure on prices and making the job of the independent Reserve Bank harder.
Australia is one of only nine countries to be rated AAA by all three major credit rating agencies and this was achieved for the first time under the last Labor Government.
The S&P report is a reminder of the importance of our responsible economic management, especially in these uncertain times.
The Albanese Government will continue on this path in our May Budget by making our nation’s finances more responsible, our economy more resilient and providing targeted and responsible cost‑of‑living relief that doesn’t add to inflationary pressures.