S&P calls on states and territories to finalise budget numbers
Standard & Poor’s says the ‘commitment to transparency’ of Australia’s states may come into question unless they lock in budget dates soon.
Global ratings agency Standard & Poor’s has piled pressure on states to finalise budget dates despite the uncertainty of the COVID-19 crisis, as it warned that the extended delay in handing down final financial accounts amid the pandemic “calls into question some states’ commitment to transparency”.
S&P conceded that “budgeting in the midst of a crisis is tough”, as it noted Victoria’s stage-four restrictions were announced just 10 days after fiscal updates from the federal and Victorian governments.
“Nevertheless, if budgets continue to be delayed well into calendar 2021, we may reconsider our longstanding views on the commitment of policymakers to fiscal transparency,” it said.
“This is a key component of our financial management assessments on individual states and our institutional framework assessment that underpins all state ratings.”
States and territories followed the Commonwealth’s lead and delayed their full budgets until after October 6, instead opting for fiscal and economic updates.
Only five of eight Australian jurisdictions have committed to a budget date, S&P said. These included Western Australia on October 8, South Australia and Northern Territory on November 10, Tasmania on November 12 and NSW on November 17.
Budget timing will be finalised in the ACT and Queensland following elections in October, while Victoria’s final set of numbers will come after it contains its second wave of virus cases.
The level of transparency lags that of other countries, S&P noted.
In the US, just 12 states had failed to enact a 2020-21 budget before June 30, while New Zealand’s 78 councils stuck to their June 30 statutory deadline, “with only a handful of exceptions”.