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ACT risks Victoria-style downgrade as deficit blows out to $1b

S&P has told the ACT it must turn its finances around within a year or two, or else it will join Victoria as the lowest-rated Australian government.

Michael Read
Michael ReadEconomics correspondent
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Ratings agency S&P has warned the ACT it will receive a credit rating downgrade if it fails to plug its near-$1 billion deficit, putting the territory at risk of rivalling Victoria as the country’s most fiscally precarious government.

Releasing the territory’s mid-year budget update on Thursday, ACT Treasurer Chris Steel revealed a deficit blowout of $347 million to $972 million in 2024-25, blaming an unexpected spike in demand for hospitals.

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Michael Read is the Financial Review's economics correspondent, reporting from the federal press gallery at Parliament House. He was previously an economist at the Reserve Bank of Australia and at UBS. Connect with Michael on Twitter. Email Michael at michael.read@afr.com
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    Original URL: https://www.afr.com/policy/economy/act-risks-victoria-style-downgrade-as-deficit-blows-out-to-1b-20250207-p5lacm