Queensland credit rating downgrade now ‘highly likely’: Treasurer

It is “highly likely” that Queensland’s credit rating will be downgraded as a result of the state’s finances, Treasurer David Janetzki revealed on Thursday during what he repeatedly referred to as “Labor’s last budget update”.

Briefing journalists during the Mid-Year Fiscal and Economic Review, Janetzki said Queensland should be prepared to lose its AA+ rating, which would increase borrowing costs.

That was largely due to the state’s debt being forecast to reach $217.83 billion by 2027-28, an increase on the $172 billion estimated in Labor’s 2024 budget.

Queensland Treasurer David Janetzki delivers the Mid-Year Fiscal and Economic Review on Thursday.Credit: Markus Ravik

Janetzki said the blowout was mainly a result of existing government programs and services that went unfunded in Labor’s last budget.

“A key part of our plan is listening to our credit rating agencies and talking with them – and talking with them seriously,” he said.

“So before any of this information went public, I spoke yesterday afternoon with ratings agencies.

“I spoke with both Standard and Poor’s and Moody’s because I wanted to send a clear message [about] how seriously we are taking this challenge that lies before us.

“I talked to them about our plan, and our plan to not progress with Pioneer Burdekin [pumped hydro], our plan to pause BPIC [Best Practice Industry Conditions] and crystallise those savings, which Treasury has modelled at $17 billion over five years, and they favourably received that plan.”

Before last year’s state election, then-premier Steven Miles said Queensland was “within range” to keep its AA+ credit rating stable.

Janetzki said the Miles government had not taken the importance of maintaining Queensland’s credit rating seriously.

“[Former Labor treasurer] Cameron Dick would mock any discussion about our credit rating, and he would mock questions about it, and I was always appalled by it,” he said.

“I think the treasurer of this state should take our credit rating seriously because, ultimately, it determines the credit worthiness of our state and the cost at which we borrow money, and I thought Cameron Dick’s disdain for the credit rating was disgraceful.

“My message to Queensland is that we are serious. I don’t think the former government was ever serious about fiscal responsibility. They would literally say and do anything for re-election.”

Responding to the criticism, Dick said Labor had focused on cost of living measures and government priorities, whereas the LNP had “juiced up the state’s debt forecasts” and added “funny money” expenditure without proper scrutiny or accountability.

Shadow treasurer Shannon Fentiman went further, saying that by delivering such an exaggerated account of the state’s financial challenges, Janetzki had himself put the credit rating at risk.

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