This report does not constitute a rating action. MELBOURNE (S&P Global Ratings) March 25, 2025--Australia's budget, released earlier today, is in line with our previous expectations of gradual fiscal regression. We expect the central government's fiscal balance to tip back into deficit in fiscal 2025 (year ending June 30), after two rare consecutive surpluses of 0.5% of GDP (as measured by the "headline cash balance"). When combined with weaker budgetary performance at the subnational level, this could drive the general government deficit to 2%-2.5% of GDP. Australia's net public debt remains modest by international standards and continues to support the 'AAA' rating. The Australian government has slightly loosened the purse strings in today's 2025-2026 budget as it positions for the
