Western Australia (WA) has once again solidified its top-tier financial status, as the international credit rating agency S&P Global affirmed the state’s AAA credit rating with a stable outlook. This distinction makes WA the only state or territory in Australia to hold a AAA rating from both S&P Global and Moody’s Investors Service, a rare achievement that highlights the Cook Labor Government’s robust financial management.
The AAA rating, the highest possible, reflects the strong economic foundation on which the state is built. S&P Global, in its latest report, credited WA’s solid economic performance and tight labour market as key factors supporting the state’s financial health. The report emphasised the government’s strong financial management, noting a track record of effective cost control and prudent forward estimates.
This accolade is not just a feather in the cap for the Cook Labor Government; it’s a testament to the state’s turnaround since the days when the previous Liberal-National Government lost the AAA rating in 2013. It took almost a decade for the state to regain this rating under S&P Global in June 2022, and maintaining it since then underscores the significant progress made in WA’s financial landscape.
S&P Global’s report offers a positive forecast for WA’s debt outlook, predicting that the state’s debt-to-revenue ratio will continue to decline gradually. This is particularly noteworthy as the government simultaneously channels more resources into infrastructure projects. These investments are seen as crucial for driving economic growth, diversification, and creating local jobs. Such initiatives are expected to benefit Western Australians for years to come, reflecting a commitment to long-term prosperity rather than short-term gains.
The Cook Labor Government has made record investments in both economic and social infrastructure, all while delivering operating surpluses and reducing the state’s net debt. When the government took office, net debt was projected to reach $43.7 billion. However, through careful management, it is now estimated to be $28.6 billion by 30 June 2024. This significant reduction in debt, paired with ongoing investments in infrastructure, sets WA apart from its domestic peers, who are often grappling with higher debt levels relative to their revenue.
Treasurer Rita Saffioti expressed pride in the government’s financial management since taking office in 2017. She highlighted that the Cook Labor Government has delivered six consecutive general government operating surpluses, with further surpluses forecasted through to 2027-28. This consistent financial discipline has not only secured WA’s AAA rating but has also enabled the government to provide substantial support to Western Australian households.
One of the key benefits of this strong financial position has been the ability to offer cost-of-living support to residents. In a time when many are feeling the pinch of rising expenses, the government’s ability to deliver relief while maintaining a surplus is particularly significant. This has included investments in health, housing, and homelessness, addressing critical areas that impact the daily lives of many Western Australians.
The government’s commitment to building critical infrastructure is another area where its financial management shines. These projects are not just about bricks and mortar; they represent the foundation for future economic growth. By investing in infrastructure now, the government is setting the state up for long-term success, ensuring that it remains competitive and capable of supporting a growing population.
The focus on infrastructure also supports job creation, providing employment opportunities across various sectors. This is particularly important in a state like WA, where the economy has traditionally been heavily reliant on mining and resources. By diversifying the economy and creating jobs in other industries, the government is working to ensure that WA’s economic future is not tied to the fluctuations of global commodity markets.
S&P Global’s affirmation of WA’s AAA credit rating is more than just a pat on the back for the Cook Labor Government; it is an endorsement of the policies that have been put in place to secure the state’s financial future. The government’s approach to managing the state’s finances has not only restored WA’s credit rating but has also laid the groundwork for sustainable economic growth.
The journey to this point has not been easy. The loss of the AAA rating under the previous Liberal-National Government was a significant setback for the state. It took years of careful management and tough decisions to get back to this position. The Cook Labor Government’s focus on cost control and conservative budgeting has paid off, allowing the state to invest in its future while keeping debt levels under control.
The future looks bright for WA, with S&P Global’s report providing a vote of confidence in the state’s financial management. The government’s ability to maintain a AAA credit rating while making substantial investments in infrastructure and providing support to households is a testament to its effective management of the state’s finances. As the state continues to grow and evolve, this strong financial foundation will be crucial in ensuring that WA remains a great place to live, work, and do business.
The AAA credit rating is a reflection of the hard work and dedication of those involved in managing the state’s finances. It is a recognition that WA is on the right track, with a government that is committed to making the right choices for its residents. The Cook Labor Government’s approach to financial management is one that other states and territories could learn from, as it demonstrates the importance of balancing short-term needs with long-term goals.
In a world where economic uncertainty is the norm, WA’s strong financial position is something that residents can take comfort in. The government’s ability to deliver on its promises while maintaining a surplus is a clear indication that the state is in good hands. With a AAA credit rating, WA is well-positioned to weather any challenges that may come its way, ensuring that it remains a prosperous and thriving state for generations to come.
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