Vic: Rating agency backs new Vic government

AAP General News (Australia)
12-20-1999
Vic: Rating agency backs new Vic government

MELBOURNE, Dec 20 AAP - International credit rating agency Standard and Poor's had
endorsed Victoria's new government by confirming the state's AAA credit rating, Premier
Steve Bracks said today.

S and P said today the rating reflected Victoria's low debt levels, strong financial
position and robust economy.

The new government's modest campaign initiatives did not appear to place the strong
budgetary position under much strain, it said.

"While the economy continues to grow strongly, thus boosting revenue, the minority
position of the government in the Parliament is unlikely to inhibit good fiscal outcomes."

Mr Bracks told reporters Victorians could take comfort in the agency's endorsement
of the government's policies.

"Not only did they endorse and support a AAA Credit Rating, but they also supported
Labor's modest pledges for extra spending within a tight budget framework, and our financial
and fiscal responsibility which they said was part of their decision in reaffirming the
AAA rating."

The opposition said the agency had actually endorsed the previous government, whose
good fiscal management had restored the rating.

"The state is in extremely good financial condition - the legacy of the Kennett government
has been a $1.7 billion surplus and a reaffirmation of our AAA rating," said deputy opposition
leader Louise Asher.

Labor's promise of fiscal responsibility was "almost unachievable" considering they
intended lowering taxes and reducing debt while increasing spending in some areas, she
said.

The rating agency noted that Victoria's debt burden was low following a five-year,
$30 billion privatisation program complemented by consecutive underlying cash surpluses
under the previous Kennett government.

Total public sector net debt was down to 27 per cent of revenue at June 30 compared
with 126 per cent five years earlier.

"The Bracks Labor government ... is committed to a Financial Responsibility policy
which requires it to produce a substantial budget accruals operating surplus each year,"

the rating agency noted.

The government's spending and saving initiatives were costed at reducing the 1999-2000
budget forward estimates of the accruals operating surplus by $27 million in fiscal 2000
and by about $60 million in a full year, it said.

AAP pjb/mh/bdm/de

KEYWORD: VIC RATING NIGHTLEAD

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