Standard and Poor's affirms ACT Labor's strong financial management

099/11

International ratings agency Standard & Poor’s Ratings Services (S&P) has announced today the affirmation of the ACT’s ‘AAA’ long-term and ‘A-1+’ short-term local current credit ratings.

The confirmation of the highest possible credit rating for the Territory is a welcome acknowledgement of the ACT Labor Government’s prudent financial management and strong budgetary performance over the past several years.

Standard & Poor’s has indicated that the success of the Territory’s efficiency and savings program is a very positive factor in determining the jurisdictions credit rating and considerable weight has also been given to the response of the ACT Labor Government in the face of declining revenue bases and appropriate liquidity management.

It is pleasing to see the decisions that we have made in response to the global financial crisis as well as declining GST and own source revenues, acknowledged by Standard & Poor’s today.

These have been tough decisions, and significant discipline has been exercised to determine our path back to surplus, which have paid off for the ACT.

The Territory recorded solid economic growth in 2010-11, despite the volatility being experienced elsewhere. The strength of our fiscal strategy, budget plan and the work we have done to return the budget to surplus have been acknowledged as successful strategies by Standard & Poor’s.

Standard & Poor’s also consider the ACT’s economy to be strong, with very high per capita income. S&P have stated that the Territory’s liquidity position is considered as being very positive, and the ACT Labor Government’s strong financial management provide for ongoing financial stability.

Standard & Poor’s expectation that the ACT will remain committed to its fiscal strategy to maintain a strong operating performance is reflected in the ‘stable outlook’ provided by the ratings agency.

Although the confirmation of our AAA rating reflects the confidence of Standard & Poor’s that there is an unlikely weakening in the ACT’s financial management and budgetary performance in the foreseeable future, there still remains much to achieve.

The ACT Labor Government has a strong track record of robust economic management and fiscal discipline and we remain committed to returning the Territory’s budget to surplus, and to continuing to deliver the infrastructure and services that Canberra businesses and the community need.