Australia’s “strong track record” of economic and fiscal management and its recovery from the COVID-19 pandemic has led S&P Global to affirm the nation’s AAA credit rating.
“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,” S&P Global said alongside its rating decision.
Only nine countries including Australia currently hold a AAA rating from each of the three major rating agencies.
“Australia’s budget improved in recent years on the back of tight fiscal discipline, strong labour market conditions, and high commodity prices,” noted S&P Global.
Treasurer Josh Frydenberg said that the nation had entered the pandemic from a “position of strength” after the Coalition brought the budget back into balance for the first time in 11 years, which he said had provided Australia with the capacity to respond to the crisis.
“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,” said Mr Frydenberg.
“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.”
Mr Frydenberg noted that Australia’s unemployment rate fell to a pre-GFC low of 4.2 per cent in December, which reflected the nation’s “strong economic recovery”.
“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,” he said.
