The ratings on the Commonwealth of Australia reflect the government's increased fiscal flexibility, the country's economic resilience, and the general political consensus for conservative economic policy. Constraining the ratings is the private sector's heavy external indebtedness, which exposes the national economy and the government to foreign investor sentiment. The government's fiscal flexibility is underpinned by its low net public-sector external and net general government debt burdens of about 3% of current account receipts and 5% of GDP this year, respectively, which are substantially improved from the highs of 70% and 23% in 1995. This current fiscal flexibility enhances the government's capacity to deal with this or any future economic slowdown. The Australian economy has demonstrated its robustness, with acceptable real
