Independent global ratings agency, Moody’s, has reaffirmed its confidence in South Australia’s ‘resilient and diverse’ economy and the Marshall Government’s sound financial management – maintaining the state’s existing rating (Aa1, Stable Outlook).
In its latest outlook, released yesterday following last month’s State Budget 2021-22, Moody’s acknowledged there would be a budget impact as a result of the Government’s record $17.9 billion in job-creating infrastructure investment over the next 4 years (as well as the $4 billion in economic stimulus), but said the state’s increasing debt burden remained manageable.
“The rating affirmation and stable outlook reflect Moody’s expectation that South Australia’s debt levels, while rising over the next few years, will remain moderate: and that the state’s credit profile will continue to be supported by a high level of liquid financial assets, and strong institutional framework,” it said.
Moody’s recognised the Government’s commitment to strong fiscal management, with the Budget forecast to return to a modest surplus of $48 million in 2022-23 – one year earlier than estimated in last year’s Budget – and maintains projected surpluses over the forward estimates, including $498 million in 2023-24 and $379 million in 2024-25.
“Moody’s expects the state to implement policies aimed at restoring an operating surplus, as soon as economic conditions allow, in line with the state’s sound management of its finances in the past,” it said.
Treasurer Rob Lucas welcomed the continued independent endorsement of the Government’s strong and sustainable financial management, as the state continued to drive strong, ongoing economic and jobs growth, with latest ABS Labour Force data showing there are more people employed now than before the pandemic.
“Our commitment to improving the lives, and livelihoods, of all South Australians is unparalleled as we embark on one of the biggest economic recovery efforts this stage has ever seen,” said Mr Lucas.
“We welcome the validation by independent global ratings agency, Moody’s, of the Government’s commitment to strong economic management – as we chart the state’s ongoing path through the global pandemic.”