CANBERRA, Apr 29 (NNN-AAP) – Global credit rating firm, S&P, warned that, Australia’s top-level AAA rating is under threat, from billions of dollars in election commitments from both parties.
Analysts from S&P said in a report yesterday, five days before Australia’s general elections on May 3, that, the rating could be at risk, if campaign funding pledges from the governing Labour Party and opposition Coalition, lead to larger structural deficits, debt and interest costs.
The report said that, Australia’s budget is “already regressing to moderate deficits” as spending reaches “post-war highs, global trade tensions intensify, and growth slows.”
It said that, how the elected government funds campaign pledges would be “crucial” for maintaining the AAA rating.
Hours after the report was published, the incumbent Labour government’s Treasurer, Jim Chalmers, and Finance Minister, Katy Gallagher, released the party’s pre-election costings outlining how it would fund its commitments and downplayed the risk of a credit rating downgrade.
Releasing costings is a standard step in the days leading up to the elections, where the major parties reveal how they plan to fund their policies and announcements made during the campaign.
Revealing Labour’s costings, Chalmers announced, a re-elected Labour government would raise visa fees for international students from 1,600 Australian dollars (1,021 U.S. dollars) to 2,000 Australian dollars (1,276.2 U.S. dollars).
Coalition leader, Peter Dutton, said, the party would raise student visa fees to 5,000 Australian dollars (3,190 U.S. dollars) for Australia’s eight most prestigious universities, and to 2,500 Australian dollars (1,595.3 U.S. dollars) for all other institutions.
Chalmers said that, Labour’s measure would generate an additional 760 million Australian dollars (484.9 million U.S. dollars) in revenue. He said that, the party would save another 6.4 billion Australian dollars (4.08 billion U.S. dollars) by reducing spending on consultants, contractors, labour hire, as well as, non-wage expenses, such as travel and hospitality.
Labour has made 10 billion Australian dollars (6.3 billion U.S. dollars) in election commitments, the costings said. The budget for 2025-26, which was handed down by Chalmers in March, included four billion Australian dollars (2.5 billion U.S. dollars) set aside for election pledges.
Chalmers and Gallagher said that, Australia’s cumulative budget deficit over the next four years is now projected to be one billion Australian dollars (638 million U.S. dollars), lower than projected in March.
“We will finish this election campaign with the budget in a stronger position than at the start of the election campaign,” Chalmers told reporters in Brisbane.
Opinion polls are unanimously projecting that Labour, led by Prime Minister, Anthony Albanese, is set to win a second term in power at the elections.– NNN-AAP
