The ratings on the Commonwealth of Australia reflect: The federal government's substantial financial flexibility, as reflected in declines in both net public-sector external debt and net general government debt, estimated at 15% of exports and 8% of GDP this year, respectively, from highs of 72% and 23% in 1995. Expenditure restraint at both the federal and state levels, as well as a successful privatization program, have contributed to the falling debt burden. Despite the approaching national election, recent tax reforms and the political consensus supporting fiscal prudence should help ensure that government budgets stay close to balance medium term. A resilient national economy. While domestic business activity has slowed in line with global output, Standard&Poor's expects that cautious
