Credit ratings agency S&P Global have today confirmed Western Australia’s ‘AA+/A-1+’ as they cited the State’s fiscal metrics continuing to improve.
With the McGowan Government’s expense growth limited to 2.2 per cent as opposed to the Liberal National average of 6.5 per cent, there is little surprise that the ratings agency highlighted ‘tight control of recurrent expenses’ as one of the key reasons behind the maintenance of their current rating, which was last updated in October 2018 when it was lifted.
Despite inheriting record debt from the previous Liberal National Government, S&P expect the ‘debt burden has peaked and will gradually decline during the next few years’. WA remains the only State or Territory in the country for that to be the case.
By decreasing the State’s debt burden, the McGowan Government has saved Western Australians more than $500 million on interest payments that can be used to pay for more productive uses, such as the recent schools and hospitals maintenance stimulus package, cutting TAFE fees and a 75 per cent cut to stamp duty for multi-residential apartments.
As stated by Treasurer Ben Wyatt:
“Today’s update provides further proof that the McGowan Government’s financial plan is working as we continue to turn the State’s economy around.
“More importantly, it highlights the ongoing risk that any return of the WA Liberal and National parties would have to the State’s finances.
“The previous Liberal National Government left the State with deficit budgets across the forward estimates. The McGowan Government has now turned those around to surplus positions and this has been shown to be vital to protecting the State from any future global economic headwinds.
“The Liberal and National parties destroyed the State’s finances with their profligate spending and they have showed no urge to change their ways since moving into Opposition.
“Uncosted thought bubbles like the destruction of the Government’s wages policy, the abolition of the foreign buyers’ surcharge and the expensive Roe 8 toll road, are precisely the sort of spending commitments S&P Global have warned against and put the State at risk of further downgrades – just like those they experienced when Liza Harvey was Deputy Premier.”