Chalmers takes credit for S&P affirmation of Australia's ‘AAA’ rating

The international credit rating agency S&P Global has kept Australia’s credit rating at ‘AAA’ and the federal government is quite fond of it.

Treasurer Jim Chalmers said yesterday that the government viewed the ratings agency’s announcement as an endorsement of the government’s budget released last October and its economic plan.

Chalmers also said the agency increased the fiscal assessment score from two to one.

“The report highlights the economy’s strong fundamentals, including our historically low unemployment and the good prices we get for what we sell to the world,” Chalmers said.

“This – along with the start of wage 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 has returned most revenue upgrades to the budget while restraining spending growth.”

Chalmers’ statement on the S&P Global announcement also hit on the government’s “fiscal recovery”.

“We have returned 99% of the upward tax revisions to the budget for the next two years when the inflation challenge is at its worst, and 92% above forecasts. This compares to around 40% under the former government,” said Chalmers.

“The government’s spending discipline means that payments are expected to fall in real terms over the next two years. Real spending growth is expected to average just 0.3% per year over forecasts.”

Chalmers also said there are only nine countries in the world that have an ‘AAA’ rating from the three major credit agencies.

“The S&P report is a reminder of the importance of our responsible economic management, especially in these uncertain times,” he said.

News of the maintenance of the ‘AAA’ credit rating from S&P Global is good news compared to the inflation figure of 7.8% that the treasurer advocated to address the media last week.

“This is very high inflation by historical standards, there is no use pretending otherwise – it is unacceptably high,” Chalmers said.

“This is in line with the Treasury’s forecasts for inflation and it is almost as high as the Reserve Bank’s forecast for inflation as well.”

The board of the Reserve Bank of Australia meets for the first time this year on February 7 and announces a decision on interest rates next week.

Coalition takes credit for Australia’s ‘AAA’ credit rating