State Budget

Ms WORTLEY (Torrens) (14:43): My question is to the Treasurer. Can the Treasurer update the house on credit rating agency reactions to the 2024-25 budget?

The Hon. S.C. MULLIGHAN (Lee—Treasurer, Minister for Defence and Space Industries) (14:43): I thank the member for Torrens for her question because, as members would be aware, only less than two weeks ago we delivered the 2024-25 state budget. This state budget like last year's budget continues the Malinauskas Labor government's strengthening of the state's finances.

We have not only got the budget back into surplus after three consecutive deficits under the previous Liberal government, but we are forecasting net operating surpluses across the forward estimates. Of course, the budget also shows that in the current financial year the debt position of the state budget is $3.6 billion lower than what the previous government had forecast in their last budget—$3.6 billion lower than what had been forecast by the previous Liberal government.

In the same year, the current financial year, the state government's net debt to revenue ratio is 28 percentage points lower than the former government's projections. This is a demonstrably stronger balance sheet that the state government now enjoys compared to what the previous government had. As I indicated previously to the house when I delivered the budget, we have a record $25.6 billion infrastructure investment program over the next five years, which will see debt increase across the forward estimates by $16 billion.

After each state budget—not just in South Australia, of course, but in all states and territories—the international independent credit rating agencies S&P Global, Moody's, and Fitch release their credit opinion of government finances. This is done after these rating agencies have had the opportunity to have a look at a state budget and assess the figures and projections within it.

Despite the credit rating not being officially confirmed until August, S&P commentary, released immediately after the budget was tabled, was that:

South Australia's credit metrics can withstand another rise in infrastructure spending, thanks to a likely increase in tax revenue. A strong property sector and a historically tight labor market should drive the revenue increase and ensure sufficient headroom at the 'AA+' [credit rating] level to accommodate the higher spending.

They also note that South Australia's public debt burden is mid-range, compared to its domestic peers. That is important, as all states and territories are continuing to increase infrastructure programs to ensure that their respective jurisdictions have the capacity to continue growing their economies into the future.

This is also an opinion that was shared by the Westpac economist Jameson Coombs who spoke at the UDIA luncheon on Friday. The shadow treasurer and I had the benefit of hearing Jameson speak and provide his view to us both—and the rest of the room—about what his thoughts were on the state's debt position. He reaffirmed essentially what S&P said: we are mid-pack, and the debt remains affordable, particularly given that the budget is in surplus.

This comes at a time when, after last year's state budget, we had S&P take the state's credit rating off negative watch and return it to stable. That was an important demonstration of confidence in the Malinauskas government's—

Mr Cowdrey interjecting:

The Hon. S.C. MULLIGHAN: The member for Colton says, 'That's inflation.' No, that's not inflation: that's the opinion of independent credit analysts on the strength of the state's finances. They say it is strong.