Queensland’s AA+ credit rating was initially downgraded in 2009 and has remained at that level ever since, according to S&P Global. Factors such as rising costs and increased government spending are now threatening the state’s 15-year AA+ credit rating. The assessment includes various elements like the state’s economic structure, financial performance, liquidity, debt management, and fiscal strategy.
A potential downgrade could lead to higher borrowing costs for funding state projects, including preparations for the 2032 Brisbane Olympics. This, in turn, could impact taxpayers as the government would need to allocate more funds towards interest payments rather than essential public services like hospitals and police.
S&P Global Ratings has cautioned that Queensland’s AA+ credit rating, which has not improved since 2009, could face further downgrades if the state’s budget faces more strain. Anthony Walker, an analyst at S&P, mentioned that any additional spending, whether from new policies or cost overruns, could weaken Queensland’s fiscal position and push debt levels beyond forecasts.
The current AA+ credit rating is shared by Queensland with South Australia, just below Western Australia’s top AAA rating. New South Wales, Tasmania, and the Australian Capital Territory hold an AA+/Negative rating, while Victoria is rated AA/Stable.
The warning about credit rating risks was highlighted by Queensland’s Treasurer, David Janetzki of the Liberal National Party (LNP). He pointed out the challenges in the budget due to previous government’s “reckless spending practices.” The state’s debt is projected to reach nearly $172 billion by 2027-28, with interest repayments exceeding $7.7 billion.
The current Treasurer emphasized the need for a thorough review of the budget to address escalating costs from projects inherited from the former government. Former Treasurer Cameron Dick defended his government’s spending, stating that the state’s credit rating was considered “stable” by S&P in September.
In conclusion, Queensland’s budget has come under scrutiny for budget sweeteners and rising debt, with concerns raised about unsustainable government spending. The impact of a credit downgrade could result in higher borrowing costs, affecting infrastructure and services for all Queenslanders. Please rewrite this sentence.
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