Australia's credit rating at risk

Credit ratings agency Standard & Poor's has warned it could cut Australia's coveted AAA rating if the federal government abandons the budget surplus in response to a global recession triggered by the European debt crisis.

The warning, which followed signs that Treasury is prepared to drop the long sought-after surplus target, came amid more evidence of economic weakness in Australian manufacturing and house prices, and signs that the European crisis was spreading to China, South Korea and other Asian economies.

And we can see Australia, and New Zealand for that matter, following that path if the external environment proves that much less supportive. ... READ MORE

Released by the Australian Financial Review - 3 June 2012