In a searing attack on the GST allocation system,Mookhey will use a speech to predict the state’s premium credit rating is all but lost due to next year’s controversial distribution. A budget surplus recently forecast for the state next financial year isnow no longer expected.
“Put simply – losing $11.9 billion is the equivalent of losing 19,000 healthcare workers;$11.9 billion is enough to hire 19,000 teachers,or 16,000 police officers for the next four years;$11.9 billion is how much we spend on mental health,TAFE and the NSW Police Force combined every year,” Mookhey will say in a speech to the McKell Institute think tank.
Despite a string of budget deficits since the pandemic,NSW has maintained a AAA credit rating with international ratings agencies Moody’s and Fitch,along with a AA-plus credit rating with S&P Global. NSW is one of only 21 sub-national governments worldwide to still have a premium credit rating,which helps limit the cost of borrowing and maintain investor confidence in the state.
Mookhey predicts the “Commonwealth Grants Commission $11.9 billion GST rip-off” will change that.
“It almost certainly will lead to a downgrade,” he will say.
Mookhey will say maintaining a premium credit rating must be balanced against the government’s responsibilities to keep the economy growing,to maintain jobs and to deliver essential public services.
“I think protecting family budgets takes precedence over the AAA credit rating,” he will say.