Moody’s downgrades Tasmania’s credit rating to lowest of all Australian states

ABC NEWS (Australia)

One of two major credit rating agencies has downgraded Tasmania’s rating citing the state's 'challenging' debt. Tasmania's double A3 rating is now the lowest of any Australian state. The treasurer says he's unsurprised by the move but the opposition is warning it could increase the government's borrowing costs.

Transcript

00:00Tasmania's debt crisis has deepened.

00:05The state's credit rating downgraded by ratings agency Moody's from AA2 to AA3.

00:11It is driven by a sharp rise in the state's debt burden and growing interest costs,

00:18which in our view will be challenging to contain.

00:22Credit ratings aren't the only factor in determining interest rates,

00:26but it sends a signal to lenders that Tasmania is a riskier borrower,

00:30now with the worst rating of any state.

00:33The decision by Moody's to put us onto AA3 is not a welcome decision,

00:41but an understandable decision.

00:43Treasurer Eric Abett says he's not alarmed. Others are.

00:47It's embarrassing, you could say.

00:50It's a vote of no confidence in the government's financial management.

00:54The huge debt that the Liberals have racked up will now cost more.

00:57Interest rates will be higher on that debt.

01:00More and more is being put aside to pay off the credit card.

01:03This year the budget allocated $350 million.

01:07In 2029 it soars past $700 million.

01:11The Liberals need to get on with the job of fixing the budget

01:14and start that by dropping the stadium.

01:16The Treasurer said next May's budget will include corrective action

01:19to get the finances back in line, including ramping up his efficiency

01:23and productivity units and right-sizing the public service.

01:28Thus far he's resisting too much tax talk.

01:32Increasing taxation doesn't increase the pie.

01:36What it does tend to do is to stifle the economy,

01:39but as I have been known to say from time to time, never say never.

01:43The other major agency, S&P, is expected to announce its decision in coming weeks.

01:50The Treasurer said that the

01:52The Treasurer said that the

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