Treasurer Ben Wyatt has welcomed today's announcement from credit ratings agency Moody's that it will lift the State's credit rating from Aa2 (positive outlook) to Aa1 (stable outlook).
In an act of confidence in the financial direction of the State, this increase will be the most significant improvement in the State's credit rating since 2012.
Moody's downgraded the State's Aaa rating under the previous Liberal National Government in 2014, citing the 'weak policy response to the deteriorating financial and debt position' of the previous Liberal National Government. It further revised down the State's credit rating in 2016 under then-Treasurer, Mike Nahan.
In revising its assessment of WA's credit rating, Moody's today praised the 'strong fiscal resolve of the State Government following the March 2017 election' and emphasised the McGowan Government's 'continued strong control over spending, alleviating pressure on the State's rising debt burden' as a key reason for its decision.
Moody's noted WA projected surpluses will be underpinned by tight control over recurrent expenditure, including the continued application of the Government's wages policy.
The improvement in the State's financial position under the McGowan Labor Government has resulted in interest rate spreads narrowing relative to other Australian States over the past two years. This improvement to date is expected to save Western Australians almost $20 million per year for the next four years.
The improved credit rating will create further savings on top of the $508 million saved in reduced interest payments by 2019-20, due to a $4.1 billion reduction in net debt relative to that projected under the previous Liberal National Government, as outlined in the 2019-20 State Budget.
As stated by Treasurer Ben Wyatt:
"Today's announcement from Moody's is the clearest possible endorsement of the McGowan Government's plan to restore the finances of the State.
"The message from the ratings agency is clear. The McGowan Government has the State back on track. Nevertheless, the credit ratings agency also emphasise the importance of continued fiscal restraint.
"Our long-term goal remains the return of the State's Aaa credit rating, but today we have seen proof that the hard work is paying off and that we are heading in the right direction.
"This is great news for each and every Western Australian because it means that we need to spend less to service the debt mountain left to us by the Liberal National Government and more on essential services for Western Australians."
