Ratings agency S&P Global has today revised the outlook on Western Australia's AA+ credit rating to "positive" from "stable".
The "positive" outlook reflects a one-in-three chance of an upgrade to AAA in the next one to two years, provided WA's strong financial performance continues.
Driving the change in S&P's outlook is WA's "continued budget outperformance compared with domestic and global peers" and "exceptional fiscal metrics".
S&P's also highlighted the McGowan Government's "track record of robust financial management".
Debt ratios are expected to continue to improve, despite significant new spending measures including health, social housing and responding to climate change, and the State's record investment in infrastructure.
The ratings agency observed that WA's economy has recovered strongly after the initial outbreak of COVID-19, with containment of the virus enabling a quick return of economic activity to now exceed pre-COVID-19 levels.
Western Australia's strong economic performance has "propelled broad-based revenue growth" and allowed the State to take advantage of strong commodity prices.
S&P's notes that reforms to the GST have mitigated the downside risks to WA's budget, preventing the record low GST share it otherwise would experience.
WA was stripped of its AAA credit rating under the previous Liberal-National Government in September 2013, with multiple downgrades from the credit rating agencies due to the State's rapidly deteriorating financial position and the previous government's "lack of political will" to make difficult decisions.
As stated by Premier Mark McGowan:
"S&P Global's revised outlook for Western Australia's credit rating to AA+ "positive" is excellent news for Western Australians.
"It shows our hard work to repair the State's finances has paid off.
"Strong financial management provides the capacity we need to respond to crises as they emerge and has saved Western Australia more than $1 billion in interest payments.
"We have used our strong financial capacity to deliver an unprecedented $9 billion in response measures to COVID-19 and major investments in health, social housing and to address climate change.
"Our management of COVID-19 has kept our economy and financial position stronger than almost anywhere in the world.
"Our goal is to achieve very high vaccination rates to keep Western Australians safe, and ensure our strong economic performance continues as we transition through this pandemic."
