Kouts hails latest SA credit rating
The latest credit rankings are out with a solid SA result sliding up the national scale despite costs of major builds like the Women’s and Children’s Hospital.
South Australia has held on to its AA+ credit rating from international credit agency S&P Global, Treasurer Tom Koutsantonis announced today.
SA came in second to Western Australia, with both New South Wales and Queensland also having AA+ ratings with negative financial outlooks.
South Australia’s outlook was rated “stable” due to “solid financial management”, S&P Global auditors said.
“The stable outlook on the long-term rating reflects our view that South Australia’s financial management will deliver ongoing operating surpluses and keep deficits after capital accounts below 10 per cent of total revenues over the next two years,” the auditors said.
“South Australia’s solid financial management, wealthy economy in an international context, and strong liquidity support the ‘AA+’ rating.”
It pointed to SA as “the naval shipbuilding capital of Australia” and said the economy could benefit from defence investment at Osbourne.
The auditors projected SA’s debt levels would remain “midrange” compared to the rest of Australia, despite delivering the $15.4 million North-South Corridor project and $3.2 billion Women’s and Children’s Hospital project.
The new Women’s and Children’s Hospital is now rising on a plot of Adelaide park lands adjacent to the new Royal Adelaide Hospital that was once home to the heritage-listed Thebarton Police Barracks.
The project has drawn criticism from the state’s Liberal party, with shadow health minister Jack Batty suspecting it would blow its budget and deadline of 2031, but health minister Blair Boyer insists it is “on track”.
Koutsantonis insisted the project would come in under budget when handing down his latest state budget in May.
State budget papers showed state debt would hit $53.6 billion by 2030.
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Koutsantonis said the credit rating was “further evidence that our economy is in a strong position to continue to weather international headwinds”.
“The continuation of the AA+ rating with a stable outlook for South Australia provides certainty for business and signals to investors that we are a safe and secure trading partner,” Koutsantonis said.
It comes after another major credit rating agency, Moody’s Investors Service, maintained SA’s Aa1 stable rating in July, but pointed to “a large infrastructure program and rising borrowing costs will pressure leverage metrics”.
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