Leading ratings agency gives SA economy a big tick
Leading global credit rating agency Fitch Ratings has affirmed South Australia's AA+ credit rating with a stable outlook, in yet another endorsement of the SA economy after four years of a Malinauskas Labor Government.
In a statement, Fitch declares the reffirmation of the healthy credit rating reflects “South Australia's resilient economic and fiscal performance in recent years, which we expect will continue”.
The ratings agency says it expects the budget operating surplus, adjusted according to its methodology, will “increase in each year of our scenario through [to] the fiscal year ending June 2030”.
The State Government has forecast a minor increase in state debt over the forward estimates as major capital expenditure on significant works including a Non-Stop South Road and the New Women’s and Children’s Hospital escalates. But Fitch confirms it expects “an ongoing strengthening in the operating balance to keep leverage relatively stable” while these state-building initiatives are underway.
According to Fitch, South Australia's “diversified economic base” underpins a “stronger assessment of revenue robustness”.
However, it emphasises that “the state's policy approach is to maintain a low tax burden to protect household affordability and preserve the competitiveness of its tax system, which supports inward investment and the local labour market”.
An analysis of national budget papers confirms that in terms of tax revenue per capita, South Australia remains the third-lowest jurisdiction nationally based on state and territory budget reporting, and the lowest-taxing state on the mainland.
This underlines the dishonesty underpinning Liberal Party claims that South Australians are paying higher taxes – South Australia is the nation’s lowest taxing mainland state, which is one reason the Business Council of Australia has anointed us the best place in the country to do business for the last three years running.
Fitch goes on to emphasise that the state’s spending responsibilities “centre on essential public services, with education and health together comprising about half of total expenditure”.
“South Australia has shown disciplined expenditure management, with spending growth generally in line with or below revenue growth, supporting a 'Stronger' assessment,” the assessment concludes.
“South Australia maintains a conservative approach to debt and liquidity management, underpinned by strong governance and the established market practices of the state's central financing entity, the South Australian Government Financing Authority. The state… exercises tight control over treasury operations, adheres to a disciplined borrowing framework, and demonstrates solid debt-servicing capacity.”
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Attributable to Tom Koutsantonis
It’s no surprise that rating agencies continue to endorse the South Australian economy under the Malinauskas Labor Government.
We have seen record jobs growth, with one million South Australians in work for the first time in history.
We have seen the state endorsed as the best place in the nation to do business by the Business Council of Australia for three years running.
We have seen survey after survey endorse our economic credentials, with the latest being the ANZ Stateometer placing SA in “top position” on the national index on the back of a sharp rise in business conditions and anticipated budget surpluses in every year of the forward estimates.
Contrary to the lie underpinning Liberal Party claims that South Australians are drowning in taxes, South Australia is now the lowest-taxing mainland state, after four years under Labor with no new taxes.
Contrast that with the uncertainty of an Ashton Hurn Opposition that has dishonestly kicked the can down the road and refused to declare their tax policy, deferring any decisions until a new Tax Commission can determine how the Liberals should balance the budget.
This is particularly concerning given the amount of uncosted expenditure the Liberals have already committed to, weeks before the formal election campaign has even begun.
South Australians can be sure their Tax Commission will advocate new or higher taxes to offset their profligate spending spree.
The world’s leading credit ratings agencies continue to endorse South Australia’s economic direction under Labor – South Australians know they can’t risk Ashton Hurn and her tax trap.