Jaclyn Symes maps out plan to slash spending in high-level New York meetings with credit agencies

Jaclyn Symes has told the world’s largest ratings agencies in New York she is committed to slashing Victoria’s bureaucracy and infrastructure spending after fears of a potential downgrade.

Victorian Treasurer Jaclyn Symes has told the world’s biggest ratings agencies in New York that she is committed to cutting both the size of the state’s bureaucracy and infrastructure spending as she comes under growing pressure to save the state’s credit rating.

In her first comments since jetting off to the US to sell her first budget to S & P Global and Moody’s, Ms Symes insisted that Victoria was not at imminent risk of a downgrade.

Following the high-level meetings, she claimed Victoria was still an attractive destination for investors’ and that top global ratings agencies Moody’s, S & P and Fitch reaffirmed that Victoria’s credit rating remained stable.

“They were positive meetings and (there was) no change to the stable outlook,” she said.

“It was a great opportunity to talk them through my first budget and be able to point to step three of our fiscal strategy in relation to producing a surplus.”

The trip, however, came in the wake of warnings about potential credit rating downgrades due to the state’s ballooning debt, projected to reach $194bn by 2028.

Treasurer Jaclyn Symes has shrugged off concerns about the state’s mounting debt. Picture: Asanka Ratnayake

Following last month’s budget, credit ratings agencies, including S & P and Moody’s, said the state’s outlook remained stable.

However, they expressed scepticism about the state government’s fiscal discipline.

The state’s credit rating was downgraded by S & P by two notches from AAA in December 2020, falling to AA+ and then AA, in December 2020 due to growing debt.

Moody’s also stripped Victoria of its AAA status in February 2021, before it tumbled further from AA1 to AA2 in 2022.

Another downgrade from the AA rating – already the lowest of any state in the nation – could lead to increased borrowing costs and heap pressure on the state’s Big Build roll out.

On Tuesday Ms Symes, however, described her discussions with the major agencies as “constructive and productive”.

In an attempt to show she was committed to driving down towering debt and to differentiate herself from her predecessor, Tim Pallas, Ms Symes said she explained her pledge to cut thousands of public sector jobs.

She also told agencies that the government’s huge infrastructure spend would be cut back as the Metro Tunnel and the West Gate Tunnel projects open this year.

“That was a great conversation to have with the ratings agencies, but also being able to indicate that across the forwards we will continue to reduce spending in regards to infrastructure,” she said.

The Treasurer also met with leading financial institutions including J.P. Morgan, Macquarie, Bridgewater, Black Rock flanked by Department of Treasury and Finance boffins.

Topics of discussion included Victoria’s artificial intelligence capabilities, data centres, and renewable energy.

Ms Symes said she felt a “sense of doom” for America, claiming Victoria offered stability in comparison. Picture: Asanka Ratnayake

Ms Symes said she felt a “sense of doom for America” from a geopolitical perspective, claiming Victoria offered “stability and opportunity” in comparison.

“That’s not to suggest that the American economy … is not stable,” she said.

“It’s strong, it’s growing, but … the stability of Australia, that was a great topic in conversation.”

Despite leading property and business figures repeatedly warning that international investors are avoiding Victoria due to soaring taxes and looking to NSW and Queensland instead, Ms Symes claimed American investors were looking to a state like Victoria that has “strong economic outlook, population increases and the availability of land”.

“I spoke to a lot of businesses who are interested in either expanding their current investments in Victoria or looking to invest as a new investor,” she said.

Originally published as Jaclyn Symes maps out plan to slash spending in high-level New York meetings with credit agencies