Ratings agency Moody's has warned that any sign the re-elected Turnbull government can's progress budget consolidation measures through parliament would be seen as a negative for Australia's credit rating.
Moody's Investors Service on Monday said that trends in Australia's credit profile will be determined by whether fiscal objectives are effectively implemented, whether external financing conditions remain favourable, and how the housing market affects domestic growth and financial conditions.
It said it'd be a credit negative if the Senate stood in the way of fiscal consolidation and macro-economic policy measures.
But measures that would cut the budget deficit and stabilise government debt would be positive.
Moody's expects the coalition government to provide some clarity on key policy objectives and measures in the next few weeks.
"Moody's expects fiscal consolidation to remain a key policy objective of the government," Moody's Investors Service senior vice-president Marie Diron said.
Economic momentum is likely to remain robust as the weaker Australian dollar boosts the export of services, and resilient private spending, stable unemployment and low interest rates support economic growth.
Last week, credit ratings agency Standard and Poor's downgraded Australia's credit rating outlook to negative, from stable, as a result of the fractious political environment.
S&P said the government needed to start hitting its budget forecasts to retain Australia's top-notch credit rating.
