The state's triple A credit rating remains intact with Standard & Poor's today reaffirming the AAA rating and assigning WA a stable outlook.
The state's triple A credit rating remains intact with Standard & Poor's today reaffirming the AAA rating and assigning WA a stable outlook.
S&P cited the WA's strong institutional framework for government, capable and conservative management, strong operating position and budget flexibility as supporting the decision.
Credit analyst Anna Hughes said the government's fiscal discipline underlined the state's stability.
"Despite the improving own-source revenues, Western Australia has continued to adhere to its financial strategy, which was developed in response to the economic slowdown," Ms Hughes said.
The strategy includes a net interest cost as a share of revenue measure, replacing the previous government's general-government net-debt measure.
"The stable outlook reflects the current strength of the state's financial position, and the government's commitment to fiscal prudence," Miss Hughes said.
Treasurer Christian Porter welcomed the news, saying the rating recognised his government's prudent fiscal management.
"Their report also highlights the strength of the Western Australian economy, including the State's very high Gross State Product per capita," Mr Porter said.
"As I indicated in releasing the mid-year review of the State Budget last week, it is nonetheless crucial that expenses growth is kept under control, as commodity prices will eventually return to normal and our GST revenue will continue to fall," Mr Porter said.
In the mid-year review, Mr Porter predicted billion dollar surpluses for 2011-12 and 2012-13, as well as a reign in of expenditure growth from 12 to 6.6 per cent since the previous government.
However, shadow Treasurer Ben Wyatt pointed out the 6.6 per cent growth in expenditure almost double the 3.9 per cent the government had previously budgeted for.
"Christian Porter will come knocking of the doors of Western Australian families to pay for this," Mr Wyatt said.
Ms Hughes said it would take a substantial shift in fiscal policy to cause S&P to lower WA's rating.
"A temporary deterioration in the state's financial performance would not necessarily jeopardize its 'AAA' rating," she said.
"However, several years of much weaker financial outcomes, combined with government inaction in addressing the problem, would likely impact the rating.
"The rating may also come under pressure if the ratio of net financial liabilities (net debt and unfunded superannuation) to operating revenue increases significantly.
"The state forecasts its net financial liabilities as a proportion of operating revenue, including the core government and public trading enterprises, to reach about 70% by fiscal 2014, well-below the 90% trigger Standard & Poor's has previously identified as likely to lead to a review of the rating."
WA's economy remains one of the strongest in the country, with a high per capita income and low unemployment.
In 2010, WA's gross state product per capta was $81,159 compared with the national average of $57,965.
