Tuesday, 27 May 2025

Economy

David DAVIS (Southern Metropolitan) (12:33): (922) My question is to the Treasurer. Treasurer, the ratings agency Moody’s has said in recent days that Victoria already has the lowest credit rating of any state and could face another downgrade to AA if debt reaches 240 per cent of operating revenue. Before the 2025–26 budget was handed down, Moody’s said Victoria:

… is forecasting debt in 2027 to top 213 per cent of operating revenue, up from 70 per cent six years ago.

Moody’s said Victoria needed to focus on stabilising the debt burden. Moody’s comments signalled the grave risk of a credit downgrade unless the Allan Labor government heeds the warnings. Treasurer, therefore I ask: will you assure the house and the Victorian community that Victoria will not have its credit rating downgraded further by Moody’s?

The PRESIDENT: I am not too sure how the Treasurer answers a question that is in the remit of a third party.

David Davis: On a point or order, President, it is a mark on her performance. If she is prepared to indicate she will change her performance –

The PRESIDENT: That has not alleviated my concern about the minister assuring what a third party will do. It is not in her remit.

Richard Welch: On the point of order, President, Mr Davis was referring to the criteria that was set out by Standard & Poor’s and the criteria by which a credit rating would be avoided, which is debt stabilisation. There was a clear list of factual elements to that criteria the Treasurer will need to meet.

The PRESIDENT: If I could respond to Mr Welch’s point of order, I still have the concern of asking a minister what an independent third body will or will not do when it is not within her remit.

David Davis: Treasurers in this Parliament have been asked for time immemorial about the performance of the state and credit rating agencies. The Kirner government was asked. The Cain government was asked. Other governments have been asked about the credit rating and whether the state will guarantee the position and not allow a credit downgrading by changing the budget parameters. It is the budget parameters that are within the Treasurer’s control.

The PRESIDENT: Mr Davis, I am not questioning your right to ask the Treasurer a question in any format you want to ask it. I am just airing a concern that you have asked her to give an assurance that an independent third body will do something or not do something. That is an issue that I am trying to work through. I am happy if you want to rephrase it.

David Davis: Moody’s said Victoria needed to focus on stabilising the debt burden. That is directly within the Treasurer’s control.

The PRESIDENT: Mr Davis, you are debating.

Sonja Terpstra: President, my point of order is that Mr Davis is debating the question and that there is in fact no point of order. He has asked his question, and he is abusing the standing orders by continuing to say that he has a point of order when he does not. He is just using it simply to debate the question further.

The PRESIDENT: I was just externalising my concerns. I am happy to let the Treasurer answer it how she sees fit.

Jaclyn SYMES (Northern Victoria – Treasurer, Minister for Industrial Relations, Minister for Regional Development) (12:37): Mr Davis, I reject the premise of your question and the fact that you continually ask me to intervene in the affairs of independent persons, whether they are here or even across the board. What I will point to, which I think you are trying to get to, is fiscal responsibility and discipline. Having a strategy that we have set out and doing what we said we would do is of course important to ratings agencies.

We have acquitted step 1, creating jobs, reducing unemployment and restoring economic growth. In relation to step 2, we have acquitted that because we returned to an operating cash surplus. With this budget we acquitted step 3, which was ensuring that we had an operating surplus. That has been achieved. This budget also shows that we are on track to acquit step 4 and step 5, which are about stabilising and reducing debt as a proportion of the economy. When we look at what the ratings agencies have said – I will be visiting them very soon – you are cherrypicking some statements to suit your own purposes. What I will point to is that the major credit rating agencies continue to project a stable outlook for Victoria’s credit rating. Those that want to talk down the state will choose to do so. That is a matter for you. I will continue to talk up the Victorian economy. Moody’s say:

The government’s cost-saving measures and continued re-profiling of capital expenditure sustain Victoria’s track record of strong fiscal management and governance.

I will be talking to them about making sure that in terms of what they are reflecting I can talk through that with them. They have obviously got confidence in making that statement. I look forward to continuing that conversation. S&P in their post-budget report comment:

We view Victoria’s commitment to controlling operating costs, delivering promised savings, and slowing growth in debt as important for maintaining …

our credit rating. The fiscal strategy is sound. We are achieving the steps that we said we would, and that is what the credit rating agencies are looking for.

David DAVIS (Southern Metropolitan) (12:40): I note the minister did not guarantee Victoria’s credit rating would not be downgraded. But I go further, and I am going to quote some more from what Moody’s said. Moody’s asked the Victorian government to commit to:

… more restrained spending and sustained momentum on reform.

Ryan Batchelor interjected.

David DAVIS: No, do more. I therefore ask: why has forecast spending grown from $107.7 billion in 2025–26 to $115.4 billion in 2028–29, a $7.7 billion surge, given this growth in spending will heighten the risk for a credit downgrade?

Jaclyn SYMES (Northern Victoria – Treasurer, Minister for Industrial Relations, Minister for Regional Development) (12:41): Asked and answered.

David Davis: On a point of order, President, with respect, it was not answered at all.

The PRESIDENT: All you can do is move a motion to take note of the minister’s answer.

David DAVIS (Southern Metropolitan) (12:41): I will move that the house take note of the Treasurer’s sad answer on the next day of meeting.

The PRESIDENT: You can do better than that, Mr Davis. Do you want to try again?

David DAVIS: I move:

That the Treasurer’s answer be taken into account on the next day of meeting.

Motion agreed to.