S&P says commodity rally won’t save Aussie AAA



Ratings agency Standard & Poor’s has warned that it will look past the rally in commodity prices when it evaluates Australia’s fiscal health as the nation’s prized triple-A credit rating remains at risk of a downgrade.

Australia’s sovereign rating has been classified as “on watch” by S&P since July, meaning there is a one-in-three chance it will be lowered.

Heading into the government’s budget update of December 19, the fiscal situation looks considerably healthier than it did at May’s federal budget thanks to the remarkable recovery in the price of coal, iron ore and other commodities.

But S&P analysts are not convinced that commodity prices will stay at these levels because it is largely driven by higher demand stemming from policy in China.

Their bigger concern is that the government keeps pushing out its timing for a return to surplus.

Kim Eng Tan, senior director for sovereign and international public finance ratings, said on Wednesday that S&P was forecasting China’s investment growth slowing.

“In terms of the government’s medium-term fiscal outlook, we are not quite sure that the recent rebound in prices are likely to be of a very big help in helping the government to reach a balanced budget that it promises by 2021.

“Now this 2021 target has actually been pushed back quite a few times over the course of the past few years,” he said, beginning with the initial target of 2013.


i dont think a downgrade is going to happen..but look at the power these ratings companies have to determine and dictate government policy..

Australia’s sovereign rating has been classified as “on watch” by S&P since July, meaning there is a one-in-three chance it will be lowered.”


~ by seeker401 on December 2, 2016.

7 Responses to “S&P says commodity rally won’t save Aussie AAA”

  1. I’ve said it a million times, but I’ll say it again.
    Nationalize the central banks, and let your National Treasury departments originate your money.
    You will then have no need to borrow anything from any bankster, and thus these manipulated and manipulating credit ratings will mean utterly nothing.
    Again, balance is the key. Balance your money supply to cover the economic activity within your countries, and leave paying interest to the big money private sector.
    Governments can then easily lend to those that wish to buy houses, start businesses, and attend colleges, at 0% interest (if the applicant is a decent credit risk). This will stimulate REAL wealth and give your middle classes economic power and a path to increase individual prosperity.
    After all, what is your Treasury department if not a bank?
    To be honest, I’d even replace insurance companies with public insurance.
    The way we’re doing things now, all you’re encouraging are CEO’s that make 400 times what their average employee makes.
    Why are we being so stupid?
    Now I’ll sit back and wait for the inevitable screams of “socialist!!” or the empty accusations that this idea is somehow welfare, even if you have to work to pay back the principal.

    Why are there so many people in this world that want to be parasites? To benefit off of the sweat of somebody else’s brow? To reap where they have not sown?

  2. Oztralia has been a bad goy?

  3. Why Australia’s AAA credit rating is doomed


    While the credit rating agencies could wait until the budget next May before issuing a downgrade, there seems little point in delaying the inevitable. There’s a strong chance that at least one, Standard & Poor’s, will move this week after putting the Government on notice a few months back.

    Politically, it’s a treasurer’s worst nightmare.

    From an economic viewpoint, however, it won’t make a great deal of difference. A downgrade simply would put us on the same level as the United States, the world’s biggest economy and effectively the global reserve currency.

    No longer will we be able to stand tall alongside the likes of Lichtenstein, Luxembourg, Singapore and Sweden or the other six nations that now make up the “exclusive” AAA club.

    The main effect will be on the cost of future borrowings. The Government will have to pay slightly more to borrow offshore, as will our banks and major corporations who use global debt markets. You can expect the banks to make maximum use of the publicity surrounding a downgrade to jack up rates in order to fatten their margins.

    There will be no impact on existing debt.

    • this credit rating system seems unfair. the whole idea that when somebody, including a nation, is not doing well, and therefore, a credit rating makes it harder and they have to pay more. they could not pay it to begin with. That is how the beast works. the spoils of aggression.

  4. Scott Morrison ‘not surprised’ by AAA confirmation after MYEFO


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