The funding of campaign pledges and rising expenditures will be crucial for the incoming government's ability to maintain the AAA rating.

In the recent budget, Treasurer Jim Chalmers projected a deficit of $27.6 billion for the current fiscal year, which is expected to increase to $42.1 billion by 2025-26, with deficits likely to persist through the 2030s.

Concerns have been raised that a lack of fiscal restraint could lead to higher borrowing costs and increased vulnerability to external shocks, ultimately affecting public services and living standards.

S&P Global has warned that these election spending promises could jeopardize Australia's AAA credit rating due to the potential for larger budget deficits.

Experts caution that while current fiscal policies are stimulatory and support economic growth, there is an increasing risk of complacency regarding the budget position.

S&P also noted that rising global economic risks and off-budget commitments from both political parties could further jeopardize the budget's stability.

Despite rising government spending, market reactions have remained relatively calm, with Australia's debt and deficits still low by global standards.

Australia is one of the few countries globally to hold a AAA credit rating from all three major credit rating agencies: S&P, Fitch Ratings, and Moody's Investors Service.

In the lead-up to the election, major political parties in Australia have announced significant spending commitments, including billions for first-time home buyers, tax cuts, and increased health expenditure.

The agency highlighted that over A$100 billion in 'off-budget' spending is anticipated between fiscal years 2025 and 2029, raising concerns about fiscal transparency and stability.

There is a growing call for a more vigorous debate on measures needed to structurally improve government revenue in Australia.

Historically, sound fiscal management has supported Australia's AAA rating, with net government debt averaging just 2% of GDP since the 2008-09 financial crisis.