S&P RATING – NSW ONE OF ONLY TWO STATES TO KEEP AAA
24 October 2013
NSW is one of only two states to retain a triple-A credit rating, after Standard & Poor’s affirmed its rating today.
NSW Treasurer Mike Baird welcomed the announcement from the ratings agency, but cautioned that the unchanged negative outlook was a reminder of the ongoing economic challenges facing the NSW Government.
Standard & Poor’s reported: “NSW has demonstrated some balance-sheet flexibility, such as the long-term lease of some port operations, and has allocated the funds to address its infrastructure backlog.”
“We consider NSW’s financial management as positive in an international context, supported by the institutional settings and the state’s tightened management of its operating expenditure and government businesses.”
“Maintaining our triple-A credit rating has been a huge challenge when you consider the massive downgrade in revenues across the country, and the significant infrastructure backlog we inherited here in NSW,” said Mr Baird.
“But today’s announcement by Standard & Poor’s is an endorsement of the NSW Liberals & Nationals strong financial management, which has enabled us to boost our frontline services and invest in critical infrastructure for the people of NSW.
“We have taken every possible measure to retain our rating, and today is proof that the tough decisions we are taking to clamp down on expenses and provide capacity on our balance sheet are working.
“The fact that NSW remains on negative outlook is confirmation that we continue to face difficult financial circumstances and there is still much work left to do to get the state back to a sustainable surplus position.
“With economic conditions remaining soft and ongoing pressure on our revenues, this will only add to the challenge.”
Mr Baird said expense control and the NSW Government’s asset transactions program will remain critical to strengthening the state’s balance sheet over the next 12 months.
“We have already started to release funds by recycling assets on the state’s balance sheet through our successful transactions, including the refinancing of the Sydney Desalination Plant, long-term lease of Port Botany and Port Kembla, and the sale of the state’s electricity generators, which is underway.
“Today’s announcement by Standard & Poor’s is another vote of confidence that this government is making the right decisions to prioritise and deliver for the people of NSW. We will continue along the path of restoring strength to our finances, and capacity to our balance sheet, while at the same time investing in those areas where it’s most needed.”
“It is worth remembering that Labor has opposed all of our savings measures, and every one of our reforms to the balance sheet.
“Today’s announcement illustrates why those decisions were vital to the state’s economic well-being, and have allowed us to re-invest in vital services and infrastructure, despite challenging economic conditions,” said Mr Baird.