From The Madometer at Dad’s Army on ruminations around a ratings downgrade for Australia:
There is good reason for our top rating. Just on the metrics, the country compares well, even with regard to other countries on the upper rung. For instance, Australia’s gross public debt is around 40 per cent, with a net debt position of 20 per cent. The average gross position for the G20 is around 110 per cent. Other AAA nations have figures much higher than ours: Britain at 90 per cent, Canada at 85 per cent, Germany at 70 per cent. It’s a similar story with the net figures as well, whih are often double (or quadruple) Australia’s figure.
…Quite simply then, there are no grounds for Australia to either lose its credit rating or to be given a negative outlook. Any such action would merely expose the relevant rating agency to accusations of incompetence, or even corruption.
If one ignores the rationale for a downgrade – the gigantic external vulnerability in the private sector which is a contingent liability on the Budget – then of course there is no rationale.
More importantly, with the very notion of a downgrade trashed by The Madomoter what was mere parlour discussion has suddenly become a real possibility.
