In the Australian press this morning, concerns Australia's biggest state (by land mass) could have its credit rating downgraded
WA's credit rating could be downgraded because of the falling iron ore price and the State Government's failure to curb spending.
A decision could be made within weeks by either of the major ratings agencies to strip WA of its AA+ rating as the fall in iron ore threatens to punch a $5 billion hole in the State's finances.
More:
- Two years ago, WA was rated AAA
- The steep fall in iron ore revenues, coupled with the continuing debate to get more GST, is hurting the State's longer-term plans to cut its overall debt level
- A credit rating downgrade would lead to a jump in the State's interest costs on its debt
Standard & Poor's analyst Anna Hughes:
"We're keeping a close eye on recent developments affecting WA's Budget position. We need to weigh up not just changes in GST relativities but the impact of the recent steep fall in the iron ore price."
- Moody's most recent outlook on WA ... warned the rating could be trimmed further if there was a lack of Government resolve to control spending or if debt levels climbed further.
