Ross Greenwood: Morning to you all
Listen, I was going to tell you… there are big falls in the global stock market overnight.
With markets worried about the future of Donald Trump’s presidency and a lot of allegations about him passing on secure information to Russia.
Now, here’s the Dow Jones index of US shares just a short time ago.
It’s closed – you can see here – down 235 points. That’s more than 1 per cent.
Now, our market yesterday, closed down by 61 points but you can also see today as this has started the bubble, our futures markets are also pointing to another similar fall today given that move in America.
But look, there were other causes for concern here on the markets yesterday.
While Australia had its AAA credit rating reaffirmed by Standard and Poor’s, it’s clearly becoming a very close thing.
Last night I spoke to the man who assigns Australia its AAA credit rating, Craig Michaels from S&P Global Ratings.
Now, he told me the problem started all the way back in 2010 when Wayne Swan was treasurer.
He promised the budget will be back in surplus in 2012-13 and famously it did not happen.
Since then, the surplus that has been pushed back further and further.
The ratings agencies call this fiscal slippage.
Successive governments haven’t been able to balance the budget and have pushed out the date when Australia gets back in the black.
The latest budget says 2021 – eight years later than the original target.
Standard & Poor’s says the string that’s holding our AAA credit rating is very, very, thin.
Here’s what Craig Michaels told me last night …
Craig Michaels: “Given that a very high level of fiscal slippage and our concern that there could be more, we think any further significant slippage would probably not be consistent with a AAA credit rating.”
Ross: You hear that? ‘Not consistent with a AAA credit rating’.
The government is on notice.
And why would there be slippage?
But as government says by 2021, your wages will be growing at 3 and 3/4 per cent.
Right now, they’re growing at record low rates of 1.9 per cent and government gets half of its money from you – the taxpayers – who are now struggling with those recorded low wages growth.
The dollar, this morning, sitting at 74.3 US cents