SA’s credit rating given a big tick
Ratings agency S&P Global has reaffirmed South Australia’s AA+ credit rating with a stable outlook, citing the state’s “solid financial management”.
The decision confirms South Australia as the second-highest rated jurisdiction in the nation, behind only Western Australia, and ahead of NSW and Queensland (both currently AA+ with a negative outlook).
The respected international agency noted SA’s debt would remain “midrange compared with domestic peers” despite the state being in “the delivery phase for major projects like the North-South Corridor and Women's and Children's Hospital”.
S&P Global auditors declared: “South Australia's solid financial management, wealthy economy in an international context, and strong liquidity support the 'AA+' rating.”
“The stable outlook on the long-term rating reflects our view that South Australia's financial management will deliver ongoing operating surpluses and keep deficits after capital accounts below 10% of total revenues over the next two years.
“The excellent institutional framework that governs Australian states and territories is an additional credit strength.
S&P noted: “We consider South Australia's financial management to be solid compared with that of international peers”.
It said the “local economy has been robust” with improved economic growth, and a reasonably diversified economy with relative strengths in agriculture and services.
Calling the state “the naval shipbuilding capital of Australia,” S&P noted “South Australia's economy could benefit from major defence investment over the next few decades”, citing major upcoming programs including the delivery of six Hunter-class frigates and five SSN-AUKUS nuclear-powered submarines.
Quotes
Attributable to Tom Koutsantonis
S&P Global’s decision to confirm South Australia’s credit rating as the second strongest in the country is further evidence that our economy is in a strong position to continue to weather international headwinds.
Underpinned by prudent and responsible economic management, the Malinauskas Labor Government is delivering on our election commitments with a record spend on cost-of-living measures, while delivering generational infrastructure projects and keeping the budget in surplus.
The continuation of the AA+ rating with a stable outlook for South Australia provides certainty for business and signals to investors that we are a safe and secure trading partner.