A secret credit rating commissioned by the Allan Labor Government has identified several risks facing the Victorian economy.
First revealed by the Victorian Liberals and Nationals viaFreedom of Information in April 2022, Treasurer Tim Pallas used taxpayer money to purchase a private credit rating from Fitch Ratings in a desperate attempt to deflect from Standard & Poor's and Moody's poor assessments of the Victorian economy.
New documents relating to this secret rating tabled in the Victorian Parliament have revealed:
- Victoria's debt to GDP ratio will continue to rise over the forward estimates.
- Fitch Ratings specifically excluded the financial impact of Labor's at least $9 billion 'Best Start Best Life' early childhood initiative.
- Victoria debt payback ratio is rated in the 'b' category.
- The Fitch Ratings rating was sought at a time it was believed it may influence market sentiment towards the value of Victorian Government debt.
Furthermore, the report identified failure to control capital expenditure as a key risk to Victoria's credit rating and financial position. Since this report was completed, the North-East Link has blown out by more than $10 billion and the Metro Tunnel by a further $2.4 billion.
Following a decade of financial mismanagement under Labor, Victoria's net debt is set to reach a record $187.8 billion by 2027-28, with interest repayments to exceed $1 million an hour.
Shadow Treasurer, Brad Rowswell, said: "This secret credit rating flags risks to the Victorian economy which have only worsened two years on.
"Since this rating was completed, major projects have blown out by billions, expenditure has continued to rise and the budget operating position has repeatedly deteriorated.
"Labor cannot manage money, cannot manage our economy and Victorians are paying the price."
Shadow Minister for Finance, Jess Wilson, said: "The Allan Labor Government must explain why at least $9 billion of expenditure on early childhood initiatives were deliberately excluded from this credit rating.
"Labor is not capable of managing Victoria's finances and has been caught out credit-rating shopping in an attempt to sell their own record debt to financial markets."
