Labor's last Budget failure: S&P downgrades credit rating outlook
- Credit rating agency confirms waning fiscal discipline of the former Labor government.
- Labor ignored repeated credit rating outlook warnings, leaving Queenslanders to pay a high price.
- Outlook downgrade confirms LNP warnings since early December.
Labor's legacy of cost blowouts, unfunded promises and service delivery black holes have come home to roost, as the LNP has predicted for years.
Following the release of Labor's last Budget update, S&P has announced an outlook downgrade for Queensland's credit rating, from AA+ stable to AA+ negative.
While the full financial impact of the outlook downgrade is yet to be determined, Queensland's borrowing costs will be higher.
This downgrade is Labor's last Budget failure and Queenslanders will be left to pay a high price.
In June 2024, S&P released a bulletin titled "Queensland's Budget erodes rating headroom".
It said: "Waning fiscal discipline, revenue headwinds, and a growing infrastructure pipeline are eroding the buffer for our rating on Queensland. Today's budget highlights large cost-of-living measures in the lead up to the October 2024 election, more infrastructure spending, and the Australian state's softer revenue outlook."
In September, S&P reported on Labor's 2024-25 Budget, noting multibillion-dollar one-off spending and "an upsizing of the state's already large infrastructure pipeline".
Within weeks of the Crisafulli Government taking office, in early December, the Government was upfront with Queenslanders about Labor's dire financial legacy, that on credit rating metrics, the state's performance was equivalent or inferior to other states that had already been downgraded.
Treasurer David Janetzki was very clear that it was highly likely Queensland had inherited an outlook downgrade, or even a rating downgrade.
At MYFER, the Government was again transparent with Queenslanders about the challenge of Labor's last Budget update, and the likelihood of a downgrade.
This month, S&P was even more scathing of Labor's election platform of $1.4 billion school lunches, state-owned servos and state-owned power retailers, describing it as "lavish".
Treasurer Janetzki said the sole responsibility for the credit rating outlook downgrade was with Labor and the additional cost to Queenslanders that will flow from it.
"Labor was warned repeatedly about their reckless fiscal management, but they repeatedly ignored it, leaving Queenslanders to pay a high price for their expensive failures," Treasurer Janetzki said.
"Labor's Last Budget Update revealed their $218 billion path of debt, deficit and deception.
"After a decade of lies, debt and deficit, Labor can never be trusted to manage the budget again.
"Our challenge is clear and we are up for it, we are delivering a fresh start for Queensland which includes restoring respect for Queensland taxpayers' money.
"We will continue targeting budget improvement in a calm and considered approach."
