Following the release of the State Budget 2021-22, independent credit ratings agencies have noted the state’s improving economic outlook, record job-creating infrastructure investment and strong financial management.
S&P Global said the Budget, handed down by Treasurer Rob Lucas yesterday, shows an ‘improving economic outlook that supports a gradual return to operating surpluses’ and record infrastructure investment ‘to support jobs and longer-term economic prospects.’
“South Australia benefits from a strong economy and financial management, which allow it to absorb some stresses on creditworthiness,” S&P Global said.
“The state so far has suppressed the spread of the virus, allowing its economy to open and budget to recover quickly. Its early success in containing outbreaks has supported a stronger economic recovery than otherwise would have been the case.”
S&P Global said the state’s record $17.9 billion job-creating infrastructure spend will weigh on the state’s deficits, and increase debt, however at a lower level than originally forecast.
“South Australia’s debt levels compare well with its similarly rated domestic and international peers,” it said.
“Debt continues to increase, albeit at a lower level than outlined in the previous budget, because the state plans a large infrastructure spend of around A$17.9 billion over the next four years.”
Moody’s, while noting the state’s strong recovery in unemployment to 5.8 per cent in May, said: “South Australia’s revenue recovery exceeds our initial expectations, despite the severe economic and revenue disruptions from the pandemic and border closures.”
Treasurer Rob Lucas welcomed the agencies’ comment in response to the Budget, which charts the state’s strong ongoing economic and jobs recovery, and invests a record $7.4 billion in health next year – including a landmark $163.5 million mental health package over four years – to fix ramping and ease pressure on hospital emergency departments.
Meanwhile, the State Budget has been welcomed by industry groups.
“This is an economic blueprint that will put hard hats and steel caps on workers now and into the future, helping to transform South Australia’s skyline. Importantly, the Budget strives towards making Australia’s most liveable city the nation’s most attractive place to invest and do business,” – Daniel Gannon, Property Council SA
“What Master Builders SA wanted to see today is a strong pipeline of future work. This budget will enable South Australia’s hi-vis, tradie-led social and economic fightback to continue,” Will Frogley, Master Builders SA
“Some good announcements too about the North South Corridor – in particular the work that’s gone on to ensure the corridor is future-proof with the enlarged tunnel design,” Charles Mountain, RAA
“This budget has welcome initiatives to invest in the SA mental health services plan – in particular investing in strengthening pathways for crisis support to help avoid presentations at emergency departments,” Geoff Harris, Mental Health Coalition of South Australia
“There is some really good news about the investment to build a new 20 place mental health facility for older people… at the Modbury Hospital – that’s a really important long-term solution for people that are vulnerable,” Jane Mussared, COTA
“We are not quite as excited as the Treasurer but… welcome the investments that have been made in the primary prevention end of the mental health services,” Ross Womersley, SA Council of Social Services