Australia's AAA rating is back under the microscope

SYDNEY (May 9): Australia’s AAA rating is again under the microscope as the government prepares to deliver a budget Tuesday that appears long on spending pledges and short on savings.

Of the 10 holders of the top score from the three main rating companies, Australia is the only one that’s increased its debt pile in the past three years. S&P Global Ratings put Australia on negative outlook in July following a knife-edge election that saw the government scrape together a lower house majority. The ratings company said pushing through savings would likely prove difficult and despite some successes, that’s largely been the case.

“We do look more vulnerable compared to the other countries with a AAA,” said
David Goodman, executive director of strategy at Westpac Banking Corp. “The
balance of risks are definitely tilted to the downside.”

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