Queensland Treasurer Jackie Trad says infrastructure is a higher priority than paying down debt.Queensland Labor Treasurer Jackie Trad is sticking to her planned focus on borrowing and spending to meet the needs of a growing population, despite calls for action on the state’s rising debt.
Global rating agency Moody’s Investors Service has warned a projected gap between government revenue and spending will increase debt and could challenge Queensland’s current double-A-plus standing, following a downgrade from triple-A some years ago.
But Ms Trad said she didn’t have a time frame to cut debt and get the state back on track for an upgrade back to the top-tier triple-A rating.
“We’re not going to embark upon a radical privatisation or cutting, sacking and selling program in order to accelerate our (path back to a) triple-A credit rating,” she told reporters on Wednesday, a day after handing down her first budget.
“We will do this in a responsible way, in a way that makes sure that we create jobs in the economy, that we deliver the infrastructure we need for a growing population.”
The state’s credit rating, which is a signal of the ability to repay borrowings, was cut in 2009 under the former Bligh Labor government by Moody’s and fellow ratings agency Standard & Poor’s.
Later, former LNP premier Campbell Newman failed in his promise to regain the rating and pay down $80 billion of government debt during his three years in power.
In October 2016, S&P said restoring the rating was possible within two years “if the government successfully implements its debt action plan”.
S&P global ratings analyst Anthony Walker on Tuesday said strong commodity prices forecast over the next four years would offset new spending announcements and help to shrink state debt.
“The outlook on our rating reflects our expectations that the state’s budgetary performance will remain steady, and that debt levels could rise to fund new infrastructure projects,” he said.
It follows predictions Queensland’s unemployment rate will linger at six per cent or more until 2021, despite government spending to drive growth.
Australian Associated Press