Global ratings agency Moody’s has maintained NSW’s Triple-A credit rating with a stable outlook, despite the state’s $11.9 billion GST hit from the Commonwealth Grants Commission.
The determination follows the NSW Government’s ongoing work to stabilise the state’s debt.
Treasurer Daniel Mookhey announced in the 2024-25 Budget that gross debt is projected to be $9.3 billion lower under this government by June 2026.
In its credit opinion, Moody’s cites the state’s strong governance and management as a factor in its determination.
The stable outlook reflects Moody’s expectation that the large and diverse NSW economy will remain resilient “despite slower growth and higher interest rates, continuing to underpin its capacity to service the state’s growing debt burden.”
Further rationale includes:
- A mature and strong institutional framework within the Commonwealth, including partnership programs.
- A proven history of fiscal resolve and strong liquidity.
Moody’s is clear that considerable challenges remain to the state holding its Triple-A credit rating.
It states that new recurrent spending and inflation pressures will continue to hinder a return to a net operating surplus.
In addition, Moody’s notes that infrastructure spending will see fiscal deficits persist.
The NSW Coalition delivered the biggest deficits in the state’s history and handed over a record debt that was on track to reach $188 billion.
The Minns Labor Government continues the work of bringing the state’s debt under control.
Treasurer Daniel Mookhey said:
“This determination is an acknowledgment of the difficult work that has been done to wrangle the state’s debt back under control.
“We accept that stress remains on the Triple-A rating and Moody’s provides a sobering reminder of the work still ahead.”
Minister for Finance Courtney Houssos said:
“The Minns Labor Government will continue to rebuild the state’s finances while delivering targeted cost-of-living relief to families and households across NSW.
“We will maintain our fiscally disciplined approach as we build a better NSW, working hard to repair the public services our communities rely on.”