S&P officially puts Australias AAA on downgrade watch
Standard & Poor’s has put Australia on downgrade watch, formally signalling that the next most likely move will be to cut the nation’s AAA credit rating.
In a dramatic acceleration in its assessment of Australia’s ability to manage its budget problems following Saturday’s election outcome, the agency said it has put the rating on “negative” outlook from “stable.”
There is now a “one in three” chance the rating will be cut within two years if S&P senses the next parliament fails to either hike taxes or cut spending enough to curb ballooning budget deficits and debt.
The likely downgrade will be the first since the late 1980s and threatens to drive up borrowing costs for the nation’s banks and home buyers.
There may also be an impact on the cost of borrowing by the Commonwealth and state and territory governments, a concern flagged earlier this week by NSW Premier Mike Baird.
Treasurer Scott Morrison said S&P’s statement had provided an important reminder to the incoming Parliament about the “reality of the fiscal environment and the global economic environment.
“We all – the government in particular – need to live within our means,” Mr Morrison said in Sydney. “Fiscal consolidation cannot be postponed or slowed.”
“This is an important reminder of something the government has always known and sought to deliver upon in the three budgets we’ve sought to deliver over the last three years.”
if you dont fix anything..then nothing gets fixed..our debt costs the nation $40 million every day in interest..24/7..thats why we may get downgraded..its that simple..we would join other third world countries like the EU and UK.. 😉