Fitch Ratings has affirmed NSW's triple-A credit rating with a stable outlook, becoming the second global agency this week to acknowledge the Minns government's 2023-2024 Budget approach to stabilising the state's finances.
It follows the decision by Moody's on 24 October to reaffirm its triple-A credit rating, reflecting the Minns government's strong financial management and the state's diversified economy.
The state's fiscal position had weakened in recent years, exacerbated by the former government's reckless $27 billion spend in the 9 months leading up to the last election and their legacy of a $7 billion black hole of unfunded programs.
Since taking office, and through the September budget, the Minns government has begun the work of budget repair, including through the Comprehensive Expenditure Review (CER).
The CER identified $13 billion in budget improvements. These funds are being reinvested into unfunded programs and essential services to help keep the state's overall expenses at a manageable level.
As a result, the 2023-2024 NSW Budget projects a surplus of $844 million in 2024-2025.
The government has also begun the work to reduce the impact of the Debt Retirement Fund and the Transport Assets Holding Entity on the state's balance sheet. Gross debt is projected to be $173.4 billion by June 2026, which is $14.8 billion below the 2023 Pre-election Budget Update.
Net debt is now projected to peak at 12.6% of gross state product by June 2027, around 1.4 percentage points lower than at the 2023 Pre-election Budget Update.
Fitch Ratings noted its view that the strength of the NSW economy, coupled with disciplined financial management, will enable the state to withstand further global economic pressures.
Treasurer Daniel Mookhey said:
"NSW is one of two states in Australia with triple-A credit ratings and Fitch has reaffirmed this position, highlighting the successful plan the government set out in the 2023-2024 Budget.
"The state's credit ratings were under significant threat but the September budget began the repair work of reducing debt and rebuilding our essential services.
"This task continues as we work towards the 2024-2025 Budget."
