Moody’s Investor Service has endorsed the McGowan Government’s strong and responsible financial management and lifting WA’s credit rating outlook from AA1 ‘stable’ to ‘positive’
The lift in outlook follows Western Australia securing a credit rating upgrade from S&P Global in June this year, restoring the State’s AAA credit rating for the first time in nine years after it was lost by the former Liberal National Government in 2013.
In the report released today, Moody’s recognised the “sustained fiscal discipline and budget repair” under the McGowan Government, with WA continuing to be considered “an outlier compared with its domestic and international peers.”
Moody’s observed that – despite significant stress emerging in the global economy – windfall gains, tight expenditure controls, and improving revenue diversification have maintained WA’s debt burden “at moderate levels, strengthening the State’s capacity to respond to future shocks”. The State’s successful management of the pandemic is also recognised.
Furthermore, Moody’s note “despite rising interest rates, the State’s debt affordability – as measured by interest expense as a percentage of revenue – is strong.”
The report highlights the possibility for further improvements in the State’s credit assessment, noting investments to address climate change and social housing in assessing the State’s ESG profile.
As stated by Premier Mark McGowan:
“It’s pleasing Moody’s has again endorsed our strong economic and financial management, following the loss of confidence and credit rating downgrades under the former Liberal National Government.
“Monetary tightening by central banks is rapidly pushing up interest costs for governments and taking funding away from the delivery of key services. Our efforts over a number of years to repair the budget have mitigated this.
“As many commentators warn of an impending global recession, it’s important we have the capacity to respond to these challenges, with the positive assessment by multiple credit rating agencies further adding to the confidence in our State.”
