The 'AAA/A-1+' foreign and local currency sovereign credit ratings on the Commonwealth of Australia reflect our opinion of the country's sound governmental finances, resilient (albeit slowing) economy, and a transparent policy environment characterized by strong institutions. These strengths are moderated by the high level of private-sector external indebtedness at a time of heightened stress in the global financial system. Public sector finances underpin the ratings on the Australian government. The central government is in a net-creditor position, which we estimate to be at 1.2% of GDP at June 30, 2009. Furthermore, we observe that the government has been building up financial assets to fund its pension obligations, improving Australia's inter-temporal fiscal position. While we forecast that the government will report
