Australia’s only state with the coveted Triple-A credit rating from one major agency has held onto it despite ballooning debt.
The forecast from Fitch means the NSW taxpayer will be spared the pain of higher interest bills, despite accumulating a gross debt of a staggering $178.5 billion as of June.
Although it is a similar amount of debt to that of Victoria, which Fitch has given a weaker AA+ rating, it said NSW had demonstrated its capacity to absorb potential shocks.
“Fitch considers NSW's disciplined fiscal approach and resilient economic base to be key strengths,” the agency said on Wednesday.
NSW Treasurer Daniel Mookhey welcomed the announcement, saying the government was on track to reach a budget surplus next financial year.
“The family budget is under pressure, which is why we’re committed to growing NSW with more jobs, higher wages and attracting increased levels of private sector investment,” Mr Mookhey said.
“We want this to be a state that works for working families."
Victoria's gross debt is even higher at an eye-watering $215 billion.
Sydney University's Luke Hartigan told AAP after the NSW budget was handed down the treasurer's surplus forecast was ambitious.
"If the economy starts to slow down a bit, then we should probably see some fall-off in GST revenue (for NSW) as well," the School of Economics academic said.
"So it's ambitious to think we'll have a surplus, considering most of the other states have big deficits and the federal government has a deficit."
NSW also currently holds a Triple-A credit rating with global agency Moody’s and an AA+ rating from S&P Global.
In comparison, Fitch said Victoria had accumulated a lot of debt in a shorter period of time because of COVID relief programs and infrastructure projects, weakening its credit rating.
But the agency said Victoria had significant scope to increase revenue.
