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Reacting to the Liberal-National government's 2018/19 budget, S&P said it had shown a commitment to fiscal prudence with a plan to return a balanced budget earlier than previously announced.
However, there were risks to the fiscal outlook, including global trade tensions and strains in emerging markets.
"As such, risks to the government's plan for an earlier return to budget surpluses are significant," the agency said in a statement.
"The outlook on the long-term Australian sovereign ratings remains negative for now to reflect these uncertainties."