The ratings on the Commonwealth of Australia reflect: The government's improved fiscal flexibility, stemming from favorable net public-sector external and net general government debt burdens, estimated at about 15% of exports and 8% of GDP this year, respectively, compared with the highs of 72% and 23% in 1995. The shrinking debt burdens are the result of better fiscal performance based on expenditure restraint, and a successful privatization program. Tax reforms and a wide consensus on fiscal prudence are expected to strengthen budgetary flexibility. Australia's robust economic performance and good prospects, as a result of conservative macroeconomic policies and microeconomic structural reforms that are reinforcing resilience, flexibility, diversity, and competitiveness. Further reforms, including those under the National Competition Policy framework, should
