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Standard & Poor's says Australia's AAA rating 'is not at risk' Standard & Poor's says Australia's AAA rating 'is not at risk'
(4 months later)
Standard & Poor's ratings agency has contradicted the prime minister and treasurer’s claims that the opposition will put the country’s AAA credit rating at risk by blocking budget measures in the Senate.Standard & Poor's ratings agency has contradicted the prime minister and treasurer’s claims that the opposition will put the country’s AAA credit rating at risk by blocking budget measures in the Senate.
Tony Abbott and Joe Hockey both issued warnings on Tuesday that Bill Shorten could cost Australia its AAA credit rating if Labor joined with minority parties to block budget measures in the Senate.Tony Abbott and Joe Hockey both issued warnings on Tuesday that Bill Shorten could cost Australia its AAA credit rating if Labor joined with minority parties to block budget measures in the Senate.
The pair had seized on a report in the Australian Financial Review, headlined Australia’s AAA Credit Rating at risk: S&P, which said the agency could review the country’s credit rating if there were not substantial cuts made to the budget in coming years. The pair had seized on a report in the Australian Financial Review, headlined Australia’s AAA Credit Rating at risk: S&P, which said the agency could review the country’s credit rating if there were not substantial cuts made to the budget in coming years.
But an S&P spokesman said its long-term view was that Australia had a “stable outlook”, meaning there is less than 33% chance that the country’s coveted AAA-rating will be downgraded in the next two years.But an S&P spokesman said its long-term view was that Australia had a “stable outlook”, meaning there is less than 33% chance that the country’s coveted AAA-rating will be downgraded in the next two years.
“The rating is not at risk,” he told Guardian Australia.“The rating is not at risk,” he told Guardian Australia.
When asked if the rating, which enables Australia to borrow more cheaply than lower-rated nations, could be at risk if spending cuts in the 2013-14 budget were blocked in the Senate, the spokesman replied: “No”.When asked if the rating, which enables Australia to borrow more cheaply than lower-rated nations, could be at risk if spending cuts in the 2013-14 budget were blocked in the Senate, the spokesman replied: “No”.
He added: “Our position has been the same for years, it has not changed”.He added: “Our position has been the same for years, it has not changed”.
Earlier on Tuesday, Abbott said the previous Labor government had “vandalised” Australia’s economic future.Earlier on Tuesday, Abbott said the previous Labor government had “vandalised” Australia’s economic future.
“Labor were vandals in government and it looks like they want to continue to be vandals in opposition, as was clear on the front page of one of our papers this morning. If these necessary measures don't pass the Senate, our AAA credit rating is at risk and if we lose our AAA credit rating we pay higher rates of interest on our debt and that means it's even more than a billion dollars a month, every single month, just to pay the interest on the borrowings,” he told reporters in Canberra.“Labor were vandals in government and it looks like they want to continue to be vandals in opposition, as was clear on the front page of one of our papers this morning. If these necessary measures don't pass the Senate, our AAA credit rating is at risk and if we lose our AAA credit rating we pay higher rates of interest on our debt and that means it's even more than a billion dollars a month, every single month, just to pay the interest on the borrowings,” he told reporters in Canberra.
“So, Labor are being fiscal vandals here. Labor is putting our AAA credit rating at risk. We have a plan to tackle Labor's debt and deficit disaster.”“So, Labor are being fiscal vandals here. Labor is putting our AAA credit rating at risk. We have a plan to tackle Labor's debt and deficit disaster.”
Hockey accused Labor of opposing $40bn in savings measures, which included his calculations of the added interest to Australia’s debt and was significantly up on his claim on Monday night that the party was opposing $18bn in measures.Hockey accused Labor of opposing $40bn in savings measures, which included his calculations of the added interest to Australia’s debt and was significantly up on his claim on Monday night that the party was opposing $18bn in measures.
“There have been a number of comments today, including from Standard & Poor’s, that indicate there is a growing awareness that if Bill Shorten is going to behave like a complaints desk for the nation, he is going to abrogate his duty as someone responsible for the mess and someone who has to help fix the mess,” he told reporters in Sydney.“There have been a number of comments today, including from Standard & Poor’s, that indicate there is a growing awareness that if Bill Shorten is going to behave like a complaints desk for the nation, he is going to abrogate his duty as someone responsible for the mess and someone who has to help fix the mess,” he told reporters in Sydney.
Hockey said Labor would be hurting every household in Australia if it opposed the budget measures.Hockey said Labor would be hurting every household in Australia if it opposed the budget measures.
“It is also the case and it is an early warning, it is not a declaration, but it is an early warning from Standard & Poor’s, that they are looking closely at the passage of legislation through the Senate,” he said.“It is also the case and it is an early warning, it is not a declaration, but it is an early warning from Standard & Poor’s, that they are looking closely at the passage of legislation through the Senate,” he said.
In Standard & Poor’s statement about the budget, released last week, the agency said Australia’s projected deficit was “moderate” and the “debt burden will remain low”.In Standard & Poor’s statement about the budget, released last week, the agency said Australia’s projected deficit was “moderate” and the “debt burden will remain low”.
“While the previous Labor government had made significant budget savings decisions, some of its other recent policies will increase spending in the longer term,” the statement said.“While the previous Labor government had made significant budget savings decisions, some of its other recent policies will increase spending in the longer term,” the statement said.
“...Overall, this budget, along with the nature of the current political debate, is consistent with our view of strong political commitment to prudent budget finances. The government flagged its intention to make politically-sensitive spending cuts of this nature well in advance. It strongly signalled its intentions to address spending pressures since before the September 2013 general election, continuing most recently with the release of the Commission of Audit report. Indeed, ongoing willingness to make difficult budgetary choices may well be needed in coming years.”“...Overall, this budget, along with the nature of the current political debate, is consistent with our view of strong political commitment to prudent budget finances. The government flagged its intention to make politically-sensitive spending cuts of this nature well in advance. It strongly signalled its intentions to address spending pressures since before the September 2013 general election, continuing most recently with the release of the Commission of Audit report. Indeed, ongoing willingness to make difficult budgetary choices may well be needed in coming years.”
The Labor party has declared its opposition to $7 co-payments to GPs.The Labor party has declared its opposition to $7 co-payments to GPs.