Global ratings agency S&P has today reaffirmed the state’s AA+ credit rating after examining the Minns Labor Government’s 2024-25 Budget in detail.
S&P’s rating comes months after fellow rating agencies Moody’s and Fitch maintained the state’s Triple A credit rating despite NSW losing $12.6 billion in forecast GST revenue this year.
S&P made note of the progress the government has made so far.
But the agency warned, through a revised outlook from stable to negative, about the risks that remain, including the government’s moves to finalise major award negotiations after the abolition of the previous government’s wage cap.
Employee expenses will account for 39.1 per cent of overall expenditure in 2024-25, growing to 40.6 per cent by 2027-28. This is below the average of what the former government delivered.
The Minns Labor Government has shown over two budgets that:
- Gross debt is on track to fall by $9 billion by June 2026, compared to the previous government’s last forecast.
- This is despite being handed the biggest debt ever passed from one state government to another.
- The deficit is shrinking to $3.6 billion compared to the $10.6 billion that this government inherited.
- The state has identified $13 billion of savings.
The Minns Labor Government remains focused on cleaning up the mess left by the former government, including a final reckless $27 billion spend in the leadup to the last election.
Treasurer Daniel Mookhey said:
“S&P’s ratings affirmation is welcome. Especially in the wake of the Commonwealth Grants Commission’s decision to rob NSW of $12 billion in GST funding.
“Of course the government will need to manage industrial relations risk, just as we have to manage inflation risk, construction risk and economic risk in these turbulent times.
“The $6.6 billion we have invested in lifting the wages of essential workers has been paid for by the savings and offsets we have found.
“To fix our essential services we have to be able to talk with our workforce. You cannot reform public services under the previous government’s crude, legislatively enforced wages cap.
“That’s why we will always search for opportunities to offset wage increases by spending the public’s money better. That remains our approach.”
Finance Minister Courtney Houssos said:
“Getting the state’s spending under control after more than a decade of waste and mismanagement remains a crucial government priority. This sets us up to deal with future challenges that may come our way.
“We are continuing to work hard to deliver the essential services that families and households rely on in a fiscally prudent and measured way.”