Arabic version: كوينزلاند تواجه خفضاً وشيكاً في تصنيفها الائتماني
According to ABC News, Queensland is on the brink of a credit rating downgrade, with the ABC understanding that a downgrade is imminent. The prospect has intensified debate between Canberra and the LNP state government over the causes of the state’s deteriorating fiscal position.
AMP chief economist Shane Oliver said a reduction in Queensland’s AA+ rating would increase the cost of maintaining the state’s growing debt. He said this could leave less money for government services, create pressure for higher taxes, or lead to a larger budget deficit. Oliver said there would be a cost to Queenslanders.
Federal Treasurer Jim Chalmers called the risk “very troubling” and said he was concerned that Queensland’s fiscal position had sharply deteriorated despite substantial and increased Commonwealth support. Queensland Treasurer David Janetzki, who has said a downgrade was likely since the LNP came to government in 2024, blamed the former Labor government and the effects of the latest federal budget.
Oliver said both state and federal factors could be argued as contributors. He cited the falling property market, rising bond yields, the GST carve-up and insufficient fiscal austerity at state level. Falling stamp duty revenue, linked to lower property prices and fewer home sales, was also threatening Queensland’s efforts to return to a more sustainable financial position.
Total debt is forecast to exceed $216 billion by 2029-30, a 52 per cent increase over four years. Interest expenses are expected to reach $6.83 billion in the current financial year and almost $11 billion by 2029-30. Janetzki’s July budget forecast a return to surplus by 2029-30, but a downgrade would cast doubt on that outlook. Credit agency S&P declined to comment on any announcement or decision.
