SYDNEY (Reuters) - Ratings agencies Moody’s and Standard & Poor’s left Australia’s AAA ratings unchanged on Tuesday after the conservative government handed down its budget, saying the nation was on track to return to surplus.
The improving budget position - which would mark the first surplus in a decade - enabled the government to announce tax cuts and increased health, education and infrastructure spending ahead of a national election due to be called for mid-May.
“The central government will achieve stronger fiscal outcomes than we anticipated in the near term because of robust commodity prices and terms of trade,” Standard and Poor’s said in a statement.
“The federal budget released today supports our view that the government is on track to return to surplus,” it said. Australia is one of 11 countries with a AAA rating from S&P.
Moody’s said that strong employment growth had also supported the economy.
“The budget indicates an ongoing, but modestly slower, pace of fiscal consolidation than was previously indicated,” Martin Petch, vice president of Moody’s Investors Service, said in an emailed statement.
“Overall, Australia’s high levels of debt affordability and moderate debt burden will remain in line with its AAA rated peers.”
Reporting by Tom Westbrook; Editing by Richard Borsuk & Kim Coghill