A global credit rating agency says decentralisation does not pose a big risk to the ACT's economy at present, while upgrading the territory's credit rating to the highest possible category.
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Standards and Poor's raised the ACT's credit rating to AAA with a stable outlook on Wednesday, after more than two years of a negative outlook.
It came after the ratings agency bumped up the Commonwealth government's outlook last week to stable, after it was downgraded in 2016 due to uncertainty after the federal election and high levels of debt.
No state or territory can have a higher credit rating or different outlook than the federal government as they rely so heavily on Commonwealth grants to fund health and education, and a negative outlook meant there was at least a one-in-three chance the credit rating could be downgraded in a year to two years.
Chief Minister Andrew Barr said the upgrade was "another strong endorsement" from the agency and only NSW and Victoria shared the ACT's highest possible credit rating.
"Today’s announcement by S and P is a strong testament of the ACT government’s economic and fiscal management," Mr Barr said.
"The ACT has weathered years of cuts from the federal government since the infamous 2014 Abbott budget. Despite the continued threat of decentralisation, Canberra currently has the lowest unemployment rate in the country and our territory budget has returned to surplus."
While S&P; said the local economy relied heavily on the public sector - accounting for around 26 per cent of output - and was more vulnerable to Commonwealth tightening than other jurisdictions, the economy was performing strongly when compared with domestic peers.
In the last fiscal year, gross state domestic product grew by 4.5 per cent, employment rose by 3 per cent and population was growing by 2.1 per cent per year.
"While any future tightening could have some dampening effect on economic growth, we believe that the impact on the ACT's operating revenues would be manageable, given that Commonwealth government departments are already exempt from territory payroll taxes," the agency said.
"Similarly, we do not consider the Commonwealth government's decentralisation agenda to pose a material risk to the ACT economy at present, given the relatively small scale of relocations to date."
Inner Sydney gained 2000 public servants, while inner Brisbane (1300) and inner Melbourne (850) also emerged as job winners while only Geelong – the new home of the agency administering the National Disability Insurance Scheme – and outback Northern Territory had triple-figure growth in federal bureaucracy jobs among regional areas under the Coalition.
Canberra emerged relatively unscathed from the most recent federal budget, where it was revealed three jobs from the Department of Infrastructure, Regional Development and Cities Indian Ocean Territories division would go to Perth; nine jobs from the Inland Rail Unit would go to Toowoomba, Dubbo and Wodonga; the Unique Student Identifier Register would move to Adelaide; and the Office of the Registrar of Indigenous Corporations to Darwin.
