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Headlines

Australia government dismisses concerns over AAA rating amid election spending pledges

Published by Global Banking and Finance Review

Posted on April 28, 2025

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SYDNEY (Reuters) -Australian Treasurer Jim Chalmers on Monday downplayed warnings that the country's AAA rating was under threat due to billions of dollars in election spending promises.

Earlier in the day, analysts at S&P Global Ratings warned in a report that the AAA rating could be at risk if campaign pledges ahead of a general election on May 3 led to larger, structural deficits.

However, Chalmers reassured the public at a press conference that the A$10 billion ($6.39 billion) in commitments made by Prime Minister Anthony Albanese's centre-left Labor party had been "more than offset" by improvements in the budget.

"If the ratings agencies are worried about spending and if they're worried about off-budget funds we have demonstrated we have found the room for our election commitments," he said.

"From time to time the ratings agencies make their views known. We take their views seriously. We are managing the budget responsibly."

Costings released by the government revealed that the budget bottom line was A$1 billion better over four years.

The government outlined plans to fund its promises — such as cost-of-living measures, building 100,000 new homes, and expanding access to affordable healthcare — through A$6.4 billion in savings and reprioritisations, including reducing the use of consultants. It also aims to raise an additional A$760 million by increasing student visa fees.

"The costings that we released today show that we will more than offset our election campaign commitments in every year of the forward estimates," Chalmers said.

The latest Newspoll, released on Sunday, showed that Labor held a four-point lead over the conservative Liberal-National opposition when votes from smaller parties were redistributed. This is part of Australia's preferential voting system, where voters rank their choices.

($1 = 1.5647 Australian dollars)

(Reporting by Christine Chen in Sydney; Editing by Sonali Paul and Sherry Jacob-Phillips)