The ACT has retained its AAA stable credit rating from Standard & Poor's, but the agency has also pointed out the territory's weak budgetary performance and rising debt.
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S&P said the territory had exceptional liquidity, a predictable funding relationship with the Commonwealth, a very strong economy and very strong financial management. It also had the ability to generate income from selling land, with $2 billion of land sales in the pipeline to 2018.
S&P pointed to the ACT's phasing out of stamp duty from house sales and increases in rates, a more predictable income stream.
Like other analysts, it rejected the ACT government's claims of a "massive black hole" created by federal cuts, saying it did not expect the Commonwealth's budget tightening to have a material impact on the ACT's revenue base.
The agency underlined a high per-capita income in the territory of $88,800 between 2011 and 2013, compared with the national average of $65,000, but highlighted the weak budgetary performance, saying it expected the territory to run after-capital deficits of about 10.6 per cent of revenue from 2013 to 2017.
The budgetary performance was weaker than previously forecast due to slower revenue growth and the decision to push out the capital spending, it said.
"We consider the main risks to the ACT's budgetary performance relate to its ability to achieve revenue targets from its land release program," S&P said.
"In addition, the ACT's debt burden is moderate and rising. We forecast the ACT's debt burden to reach about 93 per cent of operating revenues in 2017, up from just 37 per cent in 2011, reflecting our expectation of weaker budgetary performance. Total debt would reach $5 billion in 2017, up from $1.7 billion in 2011."
Questions were raised earlier in the year about whether the territory would retain its rating, given the big increase in borrowing planned by Treasurer Andrew Barr.
Mr Barr said S&P's decision to maintain the rating and the stable outlook recognised the ACT government's work to "build and transform" the ACT economy and provide stability in an uncertain economic environment
"The AAA rating is an endorsement of Labor's plan to support our economy and our people at a time when the Commonwealth government's policy of fiscal restraint and public sector staffing cuts and reduction in grants and payments to the ACT will have a significant negative impact on the ACT," he said.
The ACT is one of only two jurisdictions in the country to hold the rating; the other is Victoria.
