Coalition takes credit for Australia’s ‘AAA’ credit rating

By Melissa Coade

January 28, 2022

Josh Frydenberg strides towards us
Treasurer Josh Frydenberg likes Australia’s credit rating (AAP Image/Mick Tsikas)

The treasurer has given his government a pat on the back following news that Australia was one of nine economies worldwide to retain its ‘AAA’ credit rating. 

On Thursday rating agency S&P Global reaffirmed Australia’s rating, with treasurer Josh Frydenberg welcoming the news and crediting the Coalition LNP federal government for the outcome. 

He also sounded the political alarm – demonstrating that campaigning for the next federal election was in full swing despite a date not having been called – warning that a Labor government would mean a ‘high taxing and big spending’ federal government.

Sustainable public finances is key to retaining our ‘AAA’ credit rating and only the Coalition has a strong track record of fiscal discipline and repairing the budget,” the treasurer said.

“After balancing the budget for the first time in 11 years, Australia entered the crisis from a position of strength that provided it with the capacity to respond to the crisis.”

S&P’s rationale for the ‘AAA’ credit rating was because it said Australia’s budget improved in recent years on the back of tight fiscal discipline, strong labour market conditions, and high commodity prices. The general government budget was effectively balanced, the credit rating agency said. 

Frydenberg said the federal government’s ‘sound economic and fiscal management’ resulted in the economy’s strong recovery from the pandemic. This was also reflected in national unemployment rates falling to the lowest they had been in more than 13 years last December to 4.2%, he said.

“Since the onset of the pandemic, the Morrison government has committed $337 billion, or 16.3%of GDP, in direct economic and health support.

“This has supported household and business confidence and spending at a time of extreme uncertainty and helped ensure that Australia’s economy recovered sooner than any major advanced economy,” Frydenberg said. 

The credit rating agency also noted that the government’s ‘willingness to implement reforms to sustain economic growth and ensure sustainable public finances … [in] managing past economic and financial crises’, was also a factor in Australia retaining its rating status. 


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