‘Don’t take credit rating for granted’

PREMIER Lara Giddings has foreshadowed that slowing GST grants could lead to a potential downgrading of the state’s credit rating in an estimates committee yesterday.
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Ms Giddings said while she had no reason to be overly concerned, you “never take any rating agencies for granted” and Tasmania should be prepared for a shift.

“Moody’s is concerned about future downgrades that may occur if growth in GST grants slows further so that might be an issue of concern for them and an issue that’s outside our control,” Ms Giddings said.

“They certainly have [reduced rating levels] in some other states, in Queensland for instance they shifted their credit rating, so these things do happen,” Ms Giddings said.

Ms Giddings’s comments came on the same day key ratings agency Moody’s issued a report showing the credit quality of states remains under pressure.

Moody’s downgraded Tasmania’s credit rating from Aaa in October last year to Aa1 in response to “persistent large deficits which first emerged in 2008-09 following a long period of well-established surplus operations”, although the rating outlook for the state was stable.

That same report said if fiscal policy response to counter ongoing budget deficits are insufficient, Moody’s would consider adjusting its rating.

Ms Giddings said she would meet with both Moody’s and Standard and Poor’s in the coming weeks “to talk through the budget, talk through the strategies that sit behind the budget”.

Premier Lara Giddings and Treasury Secretary Martin Wallace share a lighter moment during an estimates committee hearing.

This story Administrator ready to work first appeared on Nanjing Night Net.

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