Goldman Sachs see risk to Australia's AAA rating on negative S&P outlook

• Government running out of time to contain another $55 billion blowout in the May 12 budget
  
• Faces its first credit ratings downgrade since 1989
• Standard & Poor's could place Australia's AAA rating on "negative outlook" within months
• Raises chance of downgrade
• "A mix of sharply lower commodity prices, weak growth and political impasse have resulted in an unprecedented degree of fiscal slippage over recent years"

“The recent sharp decline in Australia’s terms of trade and domestic political impasse have combined to further aggravate long present external vulnerabilities and weigh further on Australia’s public finances,” Toohey and Boak wrote in a note to clients. “A continuation of the recent pattern of fiscal slippage has Australia on a path to potentially experience its first ratings downgrade since 1989.”

“The firm’s previously published views on the Australian sovereign still stand and we won’t be commenting further on the matter until after the Federal budget is delivered,” Melbourne-based S&P spokesman Richard Noonan said by phone Wednesday.