States' Debt Surge Threatens Credit Ratings

0:00States and territories are getting a stern warning from S&P global analysts. If they keep handing out unaffordable costs of living relief, their credit ratings could tank. This comes as news stats show they've raked in record revenues over the past two years, but they've also gone on a massive debt-spree. Meanwhile, the federal government's triple A rating looks solid for now. It's safe unless the war in Iran drags on for years. But states outside Western Australia are in shake-year spots, with spending on big projects like Brisbane's Cross River Rail piling on more debt. Analysts like Anthony Walker point out that moves like Victoria's extended free public transport sound temporary, but they've been saying that for five years straight. It feels permanent. Queensland and New South Wales, both with double A-plus ratings and negative outlooks, are most at risk if they splurge more. Digging into the numbers from the Australian Bureau's statistics, state tax revenues jumped big time. Queensland's grew over 20% to $30.8 billion, fueled by property and payroll taxes.

1:04New South Wales saw 19.5% growth, while federal revenue only rose 9.3%. State debt shot up 37% to $722 billion in that period, way faster than the Feds. With Treasurer Jim Chalmers' budget dropping May 12th, expect cuts and reforms to tackle this mess before ratings really slip. Sydney News today, powered by AI bringing you what matters.