State Budget

The Hon. D.G.E. HOOD (14:31): Thank you, Mr President; yes, I do. My question is to the Treasurer. Treasurer, what has been the early response from the rating agencies to the budget you handed down this week?

The Hon. R.I. LUCAS (Treasurer) (14:31): The government has welcomed the early or initial responses from the two major credit rating agencies, S&P Global and Moody's. They issued initial commentary on the budget on Tuesday evening, I think it was, or early Wednesday morning, and it is fair to say that our ratings with both agencies remain as they are. However, of course, rating agencies will further consider budgets over the coming weeks and issue a final commentary on the rating. So we remain at a AA+ with S&P and Aa1—both with a stable outlook—with Moody's. S&P Global's initial commentary on the budget said, and I quote:

South Australia benefits from a strong economy and financial management, which allow the state to absorb some stresses on creditworthiness.

Job numbers and hours worked are rising relatively strongly because the state has so far been—

Members interjecting:

The PRESIDENT: Order! I'd like to hear the Treasurer.

The Hon. R.I. LUCAS: These are the independent credit rating agencies—their commentary, not commentary from partisan political parties. Let me continue:

…because the state has so far been successful at suppressing the spread of COVID-19.

We also welcome the commentary from Moody's, who said:

South Australia entered the coronavirus crisis from a position of relative fiscal strength…

And then went on to say:

Despite underlying revenue pressures, the state is projecting solid average revenue growth of 3.8% over the four years to fiscal 2024, with business activity supported by key economic and social infrastructure spending.

The government welcomes those initial statements and commentary from two of the leading credit rating agencies. Clearly, commentary and ultimately the credit rating of the credit rating agencies are important issues from the state's viewpoint.

It is fair to say that one or two of the rating agencies a number of months ago issued a generic statement in the early stages of the coronavirus pandemic and indicated that they would obviously be keeping a close watch on all state and territory budgets. It was a generic statement as it appertained to all state and territory budgets as we managed our way through the coronavirus. It was a—I think 'warning shot' is probably too strong a word; it was nevertheless a cautionary note, I guess is the best way of describing the statement a number of months ago, indicating they will be watching with great interest how governments responded in a budgetary sense to the coronavirus and to the need for economic recovery.

The early commentary from the two credit rating agencies is encouraging from the government's viewpoint, and it should give confidence to the people of South Australia that their government has a firm hand on the financial tiller of the state and is guiding it through the coronavirus pandemic on the road to economic recovery.