Moody's warns budget deadlock would be negative for Australia

[SYDNEY] Moody's Investors Service on Monday said any political deadlock in dealing with Australia's budget deficit could be negative for the country's top credit rating.

"Indications that under a coalition government with a split senate, little agreement can be reached on fiscal consolidation and macroeconomic policy measures would be credit negative," Moody's said in a statement.

"Conversely, evidence that measures that would effectively reduce Australia's budget deficit and point to a stabilisation in government debt would support Australia's credit profile."

While the coalition government of Prime Minister Malcolm Turnbull looks to have won a federal election, it will not hold a majority in the Senate.

Last week, Standard and Poor's changed Australia's ratings outlook to negative, saying the government had six to 12 months to put its budget back on a course to balance.

REUTERS