The Tasmanian Liberal Government welcomes Moody’s recent credit opinion, which recognises the strength of Tasmania’s financial position.
In its recent credit opinion, Moody’s confirmed Tasmania’s Aa2 stable credit rating and noted our sound financial management, highlighting that Tasmania’s strong position provides resilience against funding and revenue shocks.
Moody’s notes that:
“Tasmania's economic base is reasonably diverse… and has supported the resilience of own source revenues over the past two years. This has been largely achieved through strong house price growth and sales activity, which drove higher than expected conveyancing duties, while payroll taxes benefited from a sustained recovery in the state's labour markets with the unemployment rate declining to 4.3% in June 2022 from a peak of 7.8% in October 2020.”
These comments are pleasing, but it is important to note that Moody’s also makes cautionary comments, observing that global and national headwinds present downside risks to our budgetary projections. Whilst Moody’s currently expects that we will achieve our targeted balanced budget position, its analysis identifies that public sector wages “represent the largest and most imminent risks to the state returning to a balanced operating position.”
Whilst the 2022-23 State Budget provides modest buffers against cost pressures in an inflationary environment, Moody’s analysis highlights the importance of continued strong fiscal management and working together towards fair and affordable wage outcomes.
Tasmania’s strong financial position and the strength of our economy has enabled us to deal with the challenges of the COVID-19 pandemic, while delivering for all Tasmanians and supporting the Tasmanian community.
Moody’s credit opinion confirms that the Tasmanian Liberal Government continues to sensibly manage Tasmania’s finances, whilst continuing to deliver the services and infrastructure that Tasmanians need and deserve.