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Moody’s gives tick of approval to State Budget

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Global ratings agency Moody’s has given a tick of approval to the South Australian budget, saying the state’s strong revenue recovery will narrow deficits despite post-election spending commitments.

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In a statement released shortly after the budget was handed down last week, Moody’s has maintained the state’s long-term rating at Aa1 and described SA’s outlook as ‘stable’.

“Revenues have exceeded our expectations on the back of the broad-based national economic recovery and a resilient state economy, as well as the state’s close revenue linkages to the government of Australia,” the Moody’s statement said.

“Although debt-funded infrastructure spending will drive net debt higher through 2026, we note the 2023 Budget has delayed some large capital spending projects and introduced a near-term focus on smaller projects to provide increased fiscal flexibility amid rising cost pressures, labour shortages and elevated supply chain disruption, as the state pursues fiscal repair.”

“The 2023 Budget also incorporates the new government delivering on its post-election spending commitments which have been predominantly funded through reprioritisation of expenditure, a credit positive.

“Notwithstanding the rising debt levels through to fiscal 2026, our analysis concludes debt affordability will remain strong and the state’s overall debt burden will continue to benchmark favourably against its domestic peers.”

The budget also received a positive response from the Property Council.

The lobby group’s CEO Daniel Gannon, a former Liberal Party media adviser, welcomed the introduction of no new taxes.

“The message coming out of this Budget is very clear – it’s about significant infrastructure spending with a strong focus on health and education,” he said.

“This is evidenced by the $18.6b invested into infrastructure over the next four years, critically focused on health, education, sporting, cultural and recreational facilities.

“The State Government’s $178m investment in improving public housing is a serious and welcome initiative, along with its commitment to better supporting first home buyers through a low deposit home loan scheme.”

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