Australia ratings risk - "Lack of a credible medium-term fiscal consolidation plan"

Comments on the risk to Australia's AAA rating:

• "The lack of a credible medium-term fiscal consolidation plan is likely to keep the spotlight on Australia's AAA, stable rating"
• "We expect some strengthening in the subtle warnings from the ratings agencies which have emerged in recent months"

From Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney (and via Bloomberg)

More from the Bloomberg article:

• Australia's debt, already rising faster than the euro zone's, will keep ballooning as Prime Minister Tony Abbott opts to support growth and his own political fortunes rather than balance the nation's finances.
• The budget due Tuesday will forecast a wider shortfall in the year to June 2016 of A$40 billion ($32 billion), a Bloomberg survey of 20 economists showed
• With little prospect of a return to surplus this decade, net debt could swell to 17.1 percent of gross domestic product -- still a fraction of European levels but up from just 3.3 percent in 2010
• "The economic orthodoxy has been shaken and a new narrative on fiscal management is now in the early stages of being woven," said Tim Toohey, chief economist for Goldman Sachs in Australia. "This may well catch the eye of the rating agencies."