Rating agency S&P Global has affirmed Australia’s AAA credit rating, citing Australia’s strong economic recovery from the pandemic and track record of sound economic and fiscal management.
Australia remains one of just nine countries to hold a AAA credit rating from the three major rating agencies.
After balancing the Budget for the first time in 11 years, Australia entered the crisis from a position of strength that provided it with the capacity to respond to the crisis.
S&P attributes this to the fact that “Australia’s budget improved in recent years on the back of tight fiscal discipline, strong labour market conditions, and high commodity prices. The general government budget was effectively balanced…”
Since the onset of the pandemic, the Morrison Government has committed $337 billion, or 16.3 per cent of GDP, in direct economic and health support.
This has supported household and business confidence and spending at time of extreme uncertainty and helped ensure that Australia’s economy recovered sooner than any major advanced economy.
Reflecting Australia’s strong economic recovery, the unemployment rate in Australia fell to 4.2 per cent in December, its lowest rate in more than 13 years.
S&P is confident that the government will continue to secure Australia’s economic recovery, noting that “Australian governments have demonstrated a willingness to implement reforms to sustain economic growth and ensure sustainable public finances and have a strong track record from managing past economic and financial crises.”
Sustainable public finances is key to retaining our AAA credit rating and only the Coalition has a strong track record of fiscal discipline and repairing the Budget.
Australia cannot afford the threat of a high taxing and big spending Labor Government who at the last election proposed $387 billion of higher taxes and sought to divide Australians with their class war rhetoric.