27/10/2021 - 15:24

AAA back in the picture for WA credit rating

27/10/2021 - 15:24

Bookmark

Save articles for future reference.

Western Australia’s management of the COVID-19 pandemic coupled with strong commodity prices have led S&P Global to shift the government's AA+ credit rating outlook from stable to positive.

AAA back in the picture for WA credit rating
Mr McGowan said the news demonstrated the success of the state’s management of the pandemic.

Western Australia’s management of the COVID-19 pandemic coupled with strong commodity prices have led S&P Global to shift the government's AA+ credit rating outlook from stable to positive.

The outlook was revised earlier today, opening up the possibility of WA returning to the AAA rating it lost back in 2013.

The government said the move indicates a one in three chance the state will achieve a AAA rating in the next two years.

For context, the United States had a AA+rating from S&P as at March.

The state government has benefitted from a big boost in iron ore royalties and improved GST deal which have outpaced spending growth and supported bumper surpluses, with a $5.8 billion surplus in the 2021 financial year alone.

The revision is understood to have been driven by the quick return of economic activity following COVID-19, the state government’s “robust financial management” and the performance of the state’s budget against its domestic and international peers.

Despite the state government’s planned spending in infrastructure and healthcare, the agency anticipates debt ratios will continue to improve.

S&P even referenced the federal government’s recent GST deal, noting that they had mitigated the downside risks to WA’s budget.

In a statement released this afternoon, Premier Mark McGowan said the news demonstrated the success of the state’s management of the pandemic.

“We have used our strong financial capacity to deliver an unprecedented $9 billion in response measures to COVID-19 and major investments in health, social housing and to address climate change,” he said.

“Our management of COVID-19 has kept our economy and financial position stronger than almost anywhere in the world.”

He said the state’s focus would remain on achieving high vaccination rates to ensure WA’s economic performance could continue during its transition through the pandemic.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options