Debt alone not a risk to Australia rating

S&P isn't overly concerned Australia's government debt has blown out to $500 billion but is keeping a wary eye on the budget overall and house prices.

Australian government debt breaching the half a trillion dollar mark for the first time has not sent alarm bells ringing at one of the world's major credit rating agencies.

But Standard & Poor's is concerned about the federal budget more generally and the potential fallout from a collapse in Australia's house prices and why the nation's triple-A rating remains on a negative outlook.

"Debt has been creeping up for the last few years, of itself is not our main concern," Craig Michaels, S&P's director of sovereign ratings told a briefing on Tuesday.