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Category: Business, Economics and Finance / Government and Politics / Federal Government / Scott Morrison / Economic Trends

Credit rating outlook downgrade 'sobering', says Scott Morrison

Thursday, 7 Jul 2016 12:00:20 | Jane Norman And Stephen Dziedzic

Federal Treasurer Scott Morrison speaks at Lintek, Queanbeyan on May 2, 2016. (ABC News: Nicholas Haggarty)

Federal Treasurer Scott Morrison has described the downgrade of Australia's credit outlook by Standard and Poor's (S&P) as sobering and has urged all members of the forthcoming parliament to reflect on the need for government to live within its means.

Key points:

  • Budget measures must be implemented, says Scott Morrison
  • S&P warned there was a one-in-three chance Australia's AAA credit rating could be lowered within two years
  • ALP will not pass savings that would hurt low income Australians, says Chris Bowen

Mr Morrison's plea comes as Prime Minister Malcolm Turnbull begins negotiations with crossbench MPs who could help the Coalition form a minority government if it fails to win an outright majority.

The Treasurer said, given the negative outlook, it would "not be the responsible thing to do" to take policy decisions that could increase the deficit and said its budget must be implemented.

"That is the path that we need to stay on and moving away from that path would put S&P in a position where they may have to act on what they're saying here today," Mr Morrison said.

"So what this means is that our credit rating remains at AAA.

"I think it is a time for obviously sober reflection on the fact that the world is watching, particularly our ratings agencies are watching, about whether that fiscal consolidation pace can be maintained and achieved."

Mr Morrison said S&P warned there was a one-in-three chance Australia's AAA credit rating could be lowered within two years if the deficit is not sufficiently reduced.

But he rejected suggestions the Coalition was to blame and urged Labor and other parties not to block the Coalition's savings measures in Parliament.

Shadow treasurer Chris Bowen said the ALP had already agreed to some spending cuts, but would not pass savings which would hurt low-income Australians.

"We announced some of our own savings measures during the election campaign, as well as further updating our position on some of the proposals the Government had," he said.

"What we won't do is sell out on those people who rely on us to protect them in the Parliament. What we won't do is say it's OK in Australia in 2016 for unemployed people to be forced to wait a month for Newstart ... we won't do that."

Mr Bowen said the S&P assessment proved the Coalition had been incapable of managing the economy.

"And of course what we see today is Standard and Poor's calling out the Liberal National Government for three years [of] fiscal failure and passing a vote of no confidence in this Government's ability to deal with the budget situation," he said.

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