S&P reaffirms Australia's AAA credit rating

Australia has retained its AAA sovereign credit rating form S&P Global, with the ratings agency citing the nations sound fiscal position, modest public debt and strong institutional settings despite heightened global uncertainty.

S&P reaffirmed the country's top-tier credit rating, describing Australia's fiscal performance as "sound" and noting the nation maintains "modest public debt by international standards."

The agency also highlighted the federal government's tax and savings reforms as measures expected to strengthen Australia's fiscal position over the coming decade.

Treasurer Jim Chalmers said the decision reflected the government's economic management at a time of increasing geopolitical and economic volatility.

"This is a powerful endorsement of the government's responsible economic and fiscal management at a time of extreme global uncertainty," Chalmers said.

He said maintaining fiscal discipline remained critical as global risks intensified.

"Our responsible approach of finding savings and reprioritisations, spending restraint and banking all revenue upgrades has delivered one of the strongest budgets in the developed world," he said.

Australia remains one of only nine countries to hold a AAA sovereign credit rating from all three major international rating agencies.

According to the Treasurer, gross debt at the end of the last financial year was $10.6 billion below the level projected under the previous Coalition government.

"While we've delivered a substantial budget improvement, we recognise that structural pressures are intensifying rather than easing and that's why we're taking decisive action to address some of the biggest spending pressures on the budget," he said.

S&P also cited Australia's fuel security initiatives as a positive development in its assessment.

Chalmers said Australia was well positioned to navigate ongoing global uncertainty, pointing to relatively strong economic growth, low unemployment, solid wage growth and stronger public finances than many advanced economies.

"There are people who will always try to talk down our economy and budget, but this report is a reminder we have one of the strongest budget positions in the world," he said.