S&P says major fiscal stimulus in Australia could place AAA rating under pressure

Author: Eamonn Sheridan | Category: News

Ratings agency S&P with a heads up to the Australian federal government. 

  • "If this fiscal stimulus involves substantial spending initiatives and changes the trajectory of the budget, then doing so could increase downward pressure on our rating and outlook for Australia" 
  • "While spending initiatives are likely to support the economy, they're also likely to weaken Australia's fiscal flexibility to respond to future unforeseen economic shocks,"
Report via the Australian Financial Review, link here, may be gated. 


I reckon the words from S&P are pretty mild. They'd probably not be doing their job correctly if they didn't sound some sort of warning - and this is a very gentle one with plenty of hedging in it. 

In Australia, though, the politicians will run around like a bunch of chooks with their heads cut off. 

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