Credit rating agency Moody’s has joined Standard & Poors in downgrading Victoria’s credit rating.
Less than three months after Standard & Poors downgraded its credit rating for Victoria two levels from AAA to AA, Moody’s has downgraded its credit rating for Victoria from AAA to AA1 and changed the outlook to ‘negative’.
In a statement, Moody’s vice president and senior credit officer John Manning said “The downgrades reflect a marked erosion in Victoria’s governance of its public finances…”
The report said “The State’s debt burden will rise sharply and remain elevated for the remainder of the decade.”
This means both major credit rating agencies have major concerns over the Andrews Labor Government’s mismanagement of the budget.
Last year’s Labor budget ratcheted up government debt to $155 billion – the highest of any state in the country.
With predictions that interest rates will increase, this will add significant strain to the state’s interest bill.
Comments attributable to Shadow Treasurer, Louise Staley:
“Today is a sad day for Victorians as Moody’s has followed Standard & Poors in downgrading Victoria’s credit rating.
“These are the most prestigious agencies in the world calling out Labor’s budget mismanagement and its ability to repay debt.
“With news this week that the Andrews Labor Government still has no idea of the extent of cost blowouts on major projects, it is little wonder the world financial community is deeply concerned about Labor’s ability to manage the budget.
“We know that over the next few years the Andrews Labor Government will rack up $155 billion of debt with no plan to repay it. Now that both major credit rating agencies have downgraded Victoria’s rating, that debt will cost more to repay, meaning less money for roads, schools, hospitals and police.
“What this says is that Victoria is as riskier place to invest in than other states due to the mismanagement of the Andrews Labor Government.
“As every home owner with a mortgage knows if you have a lot of debt and interest rates go up, so do your interest payments, cutting back on spending in other essential areas.”