Western Australia has once again been given a glowing financial review by international credit ratings agency Standard & Poor’s, which today reaffirmed the State’s triple A credit rating, Acting Treasurer John Kobelke said.
Mr Kobelke said Standard & Poor’s latest rating of the State’s finances had again highlighted the Government’s prudent fiscal management and the positive outlook.
“Once again, international credit ratings agencies have recognised the strength of our financial position and the careful way our finances are being managed,” he said.
The analysis notes that:
· ‘The rating on Western Australia reflects its moderately low net financial liabilities, strong cash and accrual operating surpluses, prudent fiscal management and strong system of government support;’ and
· ‘The stable outlook reflects our expectation that the State’s finances will remain strong and the Government will manage any unexpected downturn in revenues if the commodity boom subsides.’
The Acting Treasurer said the report pointed out that the State continued to manage the economic boom to conservative financial parameters and had a fiscal strategy consistent with strong financial results.
“This is welcome news indeed for all Western Australians,” he said.
“I was also interested to note Standard & Poor’s comparison of WA’s position to other Australian States.”
The report notes:
· ‘The State’s balance sheet is strong compared with peers. Western Australia’s strong fiscal position offsets the risks associated with its larger than national average dependence on the mining sector.
· ‘However, Western Australia’s net financial liabilities (net debt and unfunded superannuation) is one of the strongest of its ‘AAA’ peers and is expected to remain strong over its forecast period to 2012.’
Mr Kobelke said the report was yet another endorsement of the Government’s fiscal policies.
“Once again, an independent, highly-respected international credit ratings agency has given the State Government a very big tick for the way we are managing our finances,” he said.
“The Government’s ongoing commitment to reinvesting the State’s surpluses into key infrastructure such as hospitals, schools, ports, railways and roads is clearly being recognised.
“Our ongoing AAA rating and the positive assessments of our fiscal strategy, clearly show we are using these thriving economic times to build our State for the future.”
But Mr Kobelke said although the analysis was generally very positive, it also included a note of caution.
“This report points out that while the Commonwealth has control over most taxes, it is the States who assume most of the responsibility for delivering services,” he said.
“As a result, it notes that while our State’s economy continues to record stronger than national average growth, there is increasing demand on the Government to deliver capital expenditure and services to support this growth.”
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