Legislative Assembly for the ACT: 2017 Week 10 Hansard (Tuesday, 12 September 2017) . . Page.. 3541 ..
MADAM SPEAKER: You are on your feet for a supplementary, Ms Cody.
MS CODY: Yes. The Chief Minister would like one. I am pretty sure that the Chief Minister would like a supplementary, Madam Speaker. And I would really like to hear his response this time. I note that the other side were talking all the way through Mr Barr’s previous response, so it would be good to hear this one.
Chief Minister, what are the benefits to the territory of maintaining a AAA credit rating?
MR BARR: Ms Cody, I am grateful that you asked. Clearly our maintaining a AAA credit rating demonstrates that the government is managing the territory’s finances and our economy in a responsible way. And it clearly signals to global investors that the ACT is a stable, safe and low risk investment destination providing access to a large investor base. The AAA credit rating shows that the government can deliver infrastructure and services to the community at a lower cost than would otherwise be the case.
Whilst many factors contribute to the rate of interest that we pay on our borrowings, it has been estimated that having the highest possible credit rating reduces our borrowing costs by between five and 10 basis points. That is somewhere between $50,000 and $100,000 saved annually for each $100 million that we borrow.
As one of only three AAA rated states or territories in Australia, and one of just 26 subnational jurisdictions around the world outside of the US, to hold this rating, our credit rating is also a useful selling point for attracting inbound investment to our city.
We have ambitious but very achievable plans for our city. We are showing inbound investors who are considering delivering major projects here that they can look at our AAA credit rating as one of several very positive signals about the strength of the city’s economy and the soundness of our city’s public finances.
MR PETTERSSON: What factors have contributed to the territory maintaining its AAA credit rating even while expanding investment in Canberra’s health, education and transport infrastructure?
MR BARR: I thank Mr Pettersson for the question. Standard & Poor’s have said, “The ACT’s financial management will successfully deliver its infrastructure plans, including private-public partnerships and the asbestos eradication scheme, while containing debt levels.”
It says that the government has “successfully addressed a number of challenges, including the global financial crisis in 2008-09 and the commonwealth government’s fiscal consolidation,” as well as “addressing the substantial costs involved in remediating asbestos issues in private dwellings within budget.” And our work “on reforming the ACT’s tax system towards a more stable income source and away from volatile conveyance duties,” and our plan to fully fund our superannuation liability by 2030 have been confirmed and affirmed by S&P as “credible”.