Independent global ratings agencies, Moody’s and Fitch, have re-affirmed their confidence in South Australia’s economy, applauding the Marshall Liberal Government’s ‘prudent fiscal discipline’ amid growing business confidence and burgeoning defence, space and tourism sectors.
In its latest credit update, Moody’s – which has maintained the state’s Aa1 stable rating (the second-highest in the nation) – recognised SA’s strong economic and jobs growth, underpinned by the $90 billion naval shipbuilding program and an $11.9 billion infrastructure pipeline over the next four years.
Moody’s maintained its position, published after the 2019-20 State Budget was delivered on June 18, that the state’s net debt burden, although rising to $21.3b by 2023, was “low compared to its peers’ and ‘manageable within the current Aa1 credit rating’.
Moody’s said SA has “successfully adapted to recent economic challenges, including the closure of the auto manufacturing industry, energy reliability and security…”
“Business confidence has also improved as the economy adapted to these challenges.”
Fitch Ratings, which maintained its SA rating of AA with a Stable outlook, acknowledged the Government’s tax cuts – including the abolition of payroll tax for all small businesses, land tax cuts and $360 million in ESL savings – which ‘in turn acts as a competitive advantage for businesses and inward investment and supports job creation”.
Treasurer Rob Lucas welcomed the continued independent endorsements of the Government’s strong financial management.
“Once again, this is welcome validation by two independent ratings agencies of the Government’s commitment to sustainable economic and jobs growth,’’ said Mr Lucas.
“We made it clear we wouldn’t be turning off the tap in relation to investing in productive, job-creating infrastructure and we believe now is a good time to borrow given the relatively low cost of debt currently available.
“The agencies’ reports continue to back that view.”