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House of Assembly - Fifty-Second Parliament, First Session (52-1)
2011-11-23 Daily Xml
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CREDIT RATING

The Hon. I.F. EVANS (Davenport) (14:51): Thank you, Madam Speaker. Get ready, Steph, I think you're next. My question is to the Treasurer. What is the cost to the state of the AAA credit rating moving from AAA stable to AAA negative when considering the whole-of-government debt, which is budgeted to be $7.9 billion this year?

The Hon. J.J. SNELLING (Playford—Treasurer, Minister for Workers Rehabilitation, Minister for Defence Industries, Minister for Veterans' Affairs) (14:51): Sorry, I presume that you mean from AAA to AA+?

Members interjecting:

The Hon. J.J. SNELLING: The change to—

The Hon. I.F. Evans interjecting:

The Hon. J.J. SNELLING: You mean AAA on negative watch, is that what you are saying?

The Hon. I.F. Evans interjecting:

The Hon. J.J. SNELLING: On negative watch, okay. The advice I have got is that a change for the general government sector from AAA to AA+ is in the realm of $2 million to $4 million per year on the interest that we hold, but you have got to remember that we do not go out to market. When we issue debt we do not go out to market and issue the debt in one whole large lot: we issue the debt in components over time. So, we have a rolling amount of debt. From memory, the debt that we have got out in the market at the moment expires in about 2021. So, we have debt out in the market which expires in quite a long time, which has been—

The Hon. I.F. Evans interjecting:

The Hon. J.J. SNELLING: —well, I will get to that—issued with a AAA rating. When I say '$2 million to $4 million' for the general government debt, you have to remember that that would happen over time. It would escalate over time as we went out to market and issued more debt. I think that what the member for Davenport, though, is getting at is that is just the general government sector debt, and he is absolutely right, and there would be an increase in the debt that is held by state government corporations, such as SA Water.

I have not got a figure about what the difference in the interest would be for those, but my advice is that the increase in the interest rate that we would pay, and likewise those state government corporations, would be between 0.05 per cent and 0.1 of a per cent. You can go off and do the calculations yourself. The debt that is held by SA Water, for example, or other corporations that are backed by the government, would have an increase in their interest rate of about that amount.

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