Top rating out of reach for Queensland
Ratings agency Moody’s has downgraded its outlook for Queensland’s AA1 credit rating, from stable to negative.
‘‘The change in the outlook reflects the deterioration in the state’s financial performance which has persisted since fiscal 2007-08 and the resultant high levels of indebtedness,’’ the agency said.
‘‘Scheduled improvements will only take hold in a few years, and progress could be slowed by the potential emergence of less supportive conditions.’’
Queensland lost its AAA rating in 2009, at the height of the global financial crisis, and has had a AA1 rating since.
Moody’s senior credit officer Debra Roane said the state would be unlikely to regain its former AAA rating any time soon.
‘‘Returning to AAA at this point is unlikely in the near term given the high levels of debt,’’ she said.
But Ms Roane said Moody’s supported the Liberal National Party government’s tough September budget, which made 14,000 public service positions redundant.
‘‘We find it to be a positive but it’s going to take a few years for these policies to be reflected in improvements in these (ratings) numbers,’’ she said.
Moody’s said a return to a stable outlook under the AA1 rating would require a rapid return to a sustainable surplus.
‘‘As noted, while the fiscal redress plan is a positive development, implementation will be challenging,’’ the agency said in a statement.
Treasurer Tim Nicholls has said a return to AAA would not occur until after the budget returned to a projected surplus in 2014-15.
Moody’s assigns debt ratings the Queensland Treasury Corporation, which issues debt on behalf of the state government and and state-owned corporations.