A day after S&P Global Ratings warned Australia’s prized AAA credit rating could be at risk from election spending promises, Treasurer Jim Chalmers said there was no reason to lose it if Labor is re-elected.
“The ratings agency should be very pleased, very reassured with the progress that we’ve made in the budget in just three years in office,” Chalmers said in a press conference on April 29.
He argued Labor had not only shown enthusiasm for responsible economic management but had built a strong track record.
“I invite you to recall what the budget looked like on the day that we came to office,” he said, recalling how the Treasury secretary visited him in Logan after the 2022 election, warning of “huge deficits, as far as the eye can see.”
“We turned two of them into surpluses. We halved this year’s deficit,” Chalmers said.
He further stressed Labor’s commitment to maintaining the AAA rating.
“We got them under Labor, three of them were stable under Labor. We value it,” he said.
Prime Minister Anthony Albanese reinforced Chalmers’ message, highlighting Labor’s record of delivering AAA ratings and fiscal responsibility.
“The AAA credit ratings delivered by the Labor Party. We’re very proud of that, and what we’ve also delivered is responsible economic management,” Albanese said.
Coalition Warns of Debt Blowout
S&P Global Ratings, in its April 28 report, cautioned that campaign promises could widen deficits and put upward pressure on debt and interest payments.“The ‘AAA’ rating on Australia may be at risk if election promises result in larger, structural deficits, and debt and interest expenses rising more than we expect,” it warned.
“The budget is already regressing to moderate deficits as public spending hits post-war highs, global trade tensions intensify, and growth slows.”
Both Labor and the Coalition have announced billions in new spending, including $1.8 billion for energy rebates, over $9 billion for Medicare, and $7.2 billion for Queensland’s Bruce Highway upgrades. Housing affordability measures have also featured heavily in campaign pledges.
Meanwhile, Shadow Treasurer Angus Taylor warned that under Labor’s management, Australia is heading towards “$1.2 trillion of debt” and that the AAA rating was “at risk.”
“This means that every Australian will pay more when they borrow money, not just the government, but all Australians, if we see our credit rating deteriorate. This is not the economic management we need,” Taylor said.
He criticised Labor for abandoning budget discipline.
“It’s what you get when you throw out the budget rule book, as Labor did in their first budget, and you spend, and that’s exactly what Labor has done,” he said.
Taylor promised that under a Coalition government, “You‘ll see lower taxes. We won’t be hitting superannuation, we’ll be supporting small businesses, and that’s what Australia needs right now if we’re going to get back on track.”
