Victoria has received its final warning from credit rating agency, Moody's Ratings, which has called out Labor's reckless spending, lack of debt management strategy, and weak budgetary transparency.
A further credit rating downgrade would be deeply damaging for Victoria's economy, leading to higher borrowing costs for the state, increased interest charges on ballooning debt, and eliminating any capacity for the government to deliver a surplus.
Moody Ratings has delivered a blunt assessment on the reliability of the Allan Labor Government's spending estimates, stating: "Moderating expenditure growth may prove difficult, given expenses grew at an estimated 5.5 per cent per annum."
Since 2015, Labor has overspent its own budget forecasts by an average of $14 billion per year.
Moody's Ratings has also urged the government to focus on "stabilising the debt burden," highlighting the challenge of doing so without Labor committing to "more restrained spending and sustained momentum on reform."
In a particularly pointed assessment, the agency also called for: "Broader financial reforms aimed at improving fiscal transparency and accountability may enhance governance, strengthen financial oversight, support more responsive budgeting, and improve long-term fiscal planning."
Shadow Treasurer, James Newbury, said: "We know that if Victoria receives another credit rating downgrade it will costs all of us. There will be a sharp increase in the cost of interest of Labor's debt bomb, and a wipe-out of the phony surplus Labor has projected."
"Victoria has received its final warning from the credit rating agencies, which have called out the lack of economic strategy in the recent budget."
"Jacinta Allan might be trying to ignore debt, but Moody's Ratings has made it clear that the debt burden is a dangerous risk for our state."
"Labor can't manage money, and its Victorian's who are paying the price."
