Following Standard & Poor’s (S&P) reaffirming its AAA credit rating today, Australia remains one of only nine countries around the world to hold a AAA credit rating from all three major credit rating agencies.
Despite a once in a century pandemic, which “wreaked havoc on the global economy and government balance sheets around the world”, S&P has reaffirmed Australia’s AAA credit rating following the release of the Morrison Government’s Economic Recovery Plan to create jobs and secure Australia’s future.
In its report, S&P notes that the Morrison Government’s “balance sheet was strong before the pandemic” and that “Australia's budget improved in recent years on the back of tight fiscal discipline, strong labour market conditions, and high commodity prices.”
S&P further states that “Australia's typically strong fiscal performance remains a credit strength for the rating” and that “Australia's economy is beginning to recover from its first recession in almost 30 years” and will “rebound strongly once borders open”.
Today’s decision by S&P is a further vote of confidence in the Morrison Government’s response to the health and economic crisis caused by COVID-19. The record levels of economic support we have provided has helped save 700,000 jobs.
The Government has been able to do this because we entered this crisis from a position of economic strength and had brought the Budget back to balance for the first time in 11 years. This gave us the fiscal firepower when we needed it most.
Our economic support has been provided in a temporary, targeted and proportionate manner. By doing so we have protected the structural integrity of the Budget, with over 90 per cent of the spending committed in response to the crisis occurring over the next two years.
There is still a long way to go in recovering from this health and economic crisis but the Australian economy is fighting back with around 60 per cent of the 1.3 million people who lost their job or were stood down on zero hours in April now back at work.
Next calendar year, the economy is forecast to grow by 4.25 per cent, and unemployment to fall to 6.5 per cent by the June Quarter 2022. Our economic and fiscal strategy sets out the path to grow the economy, stabilise debt, and then reduce it over time.
Consumer confidence increased 11.9 per cent in October, the largest increase in a Budget month on record since the series began in 1974 with Westpac Chief Economist, Bill Evans, commenting that it was “an extraordinary result” and that “such a development must be attributable to the response to the October Federal Budget.”
The Morrison Government’s Economic Recovery Plan is focused on job creation, rebuilding our economy and securing Australia’s future.