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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2023-08-31 Daily Xml
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Credit Ratings

Ms STINSON (Badcoe) (14:32): My question is to the Treasurer. Can the Treasurer provide the house with an update on the South Australian government's credit ratings following the release of the recent budget?

The Hon. S.C. MULLIGHAN (Lee—Treasurer) (14:32): In fact, I can. I am grateful to the member for Badcoe for her question because, sir, as you would know, each year following the budget, international independent credit ratings agencies Standard & Poor's Global, Moody's and Fitch release their credit rating opinion on the government's finances. Both Moody's and Fitch reaffirmed South Australia's credit rating at Aa1 and AA+ stable, respectively. These are the second highest rankings that both agencies offer.

Moody's noted that in its opinion it expects the Malinauskas government will achieve its target of a net operating surplus in 2023-24. It also noted that South Australia's debt affordability is projected to remain solid, with Moody's concluding that the state's debt burden will remain lower than our domestic peers. Fitch also had some high praise for the South Australian economy, saying that South Australia is a:

…relatively low-tax jurisdiction, driven by a focus on moderating the tax burden on its citizens while maintaining competitiveness of the state tax system, which promotes inward investment and supports a sturdy labour market.

Fine words indeed. While it was welcome news that Moody's and Fitch had reaffirmed our credit rating, it was the credit opinion of Standard & Poor's Global that I was most keen to see. I am pleased to report to the house that S&P Global's opinion was most notable given that South Australia's credit rating has now been removed from negative watch. You might remember that South Australia's credit rating was placed on negative watch in 2020 under the former Marshall Liberal government after the release of their 2020-21 budget.

It's great that we have been able to rectify yet another mess left to us by the former Liberal government and it's great to have the member for Dunstan here to hear this report. S&P Global have now seen enough from the Malinauskas government's first two budgets to give confidence that our credit rating of AA+ is now stable and can be taken off the negative watch it was placed on in 2020.

The Hon. V.A. Tarzia: You're welcome. We laid the groundwork.

The Hon. S.C. MULLIGHAN: The member for Hartley says, 'You're welcome,' forgetting the credit rating placed on negative watch in 2020. I take a slightly different view, just like the international ratings agencies take a different view from the member for Hartley.

In its report, S&P says that it also anticipates the state will achieve operating surpluses reversing from three years of operating deficits during the pandemic. As for the South Australian economy, the entire house will be pleased to hear that S&P notes that South Australia now has higher new business investment than in the past. Significant defence projects under construction and in the pipeline will support growth in the economy and labour market over several years. Public infrastructure investments and a pipeline of mining projects will support economic growth—unalloyed good news.

The credit opinion of all three ratings agencies reflects the Malinauskas government's demonstrated fiscal responsibility. This fiscal responsibility was demonstrated while delivering our comprehensive election commitments and responding to priority needs. Maintaining a strong credit rating for the state is important, as it ensures our interest costs remain competitive, while also indicating our capacity to respond to future needs and opportunities. This is great news for the state. It is further good evidence that we are getting the state's finances back on track after the four years under the previous Marshall Liberal government.

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