South Australian Budget 2013: The ratings agency verdict
Ratings agency Standard & Poor’s has maintained its AA rating for South Australia after its assessment of today’s 2013 South Australian Budget.
It’s unlikely to change for the better anytime soon, the agency said, while any further downward revision is also unlikely.
“…credit ratings and stable outlook on the state of South Australia are not immediately affected by the state’s budget, for the fiscal year to June 30, 2014, released today,” it said in a statement this afternoon.
“Our assessment of the strong institutional framework supporting Commonwealth-state relations in Australia, and the state’s wealthy economy in an international context, underpin the ratings on South Australia.
“Constraining the ratings are the state’s weak budgetary performance, rising debt burden, and modest budgetary flexibility.”
Standard and Poor’s said it expected debt levels will rise significantly during the four-year period ending 2017, increasing further when payments for the Royal Adelaide Hospital public private partnership come onto the state’s balance sheet from fiscal 2016.
“In our view, South Australia’s fiscal 2014 budget indicates that the state’s finances will develop in line with our expectations.
“We consider upside pressure within the rating horizon (of approximately two years) as remote.
“Downside pressure over the same period is not considered likely, but could arise from ongoing cash operating deficits that increase the state’s debt burden toward 120 per cent of revenues.”
More Budget Coverage:
- The Budget in Detail
- Kevin Naughton’s Analysis: Weatherill Makes Do
- David Washington: The Political Strategy Behind the Budget
See the full budget papers here.