Queensland’s Labor government faces a challenge in avoiding a blowout in its budget, Moody’s warns. Source: AAP
QUEENSLAND’S Labor government already faces a challenge in avoiding a blowout in its budget, Moody’s warns.
THE international credit ratings agency says Labor will need to resist upward pressure on healthcare and social services spending over the next four years to meet their targets in the state budget, handed down on Tuesday.
“The state’s ability to meet these targets will be challenging … and will necessitate strong fiscal resolve to control current spending,” Moody’s said in a statement. Treasurer Curtis Pitt said the important thing was that Standard & Poor’s and Moody’s have indicated the state’s AA credit rating won’t change. “Given what we saw in Western Australia before their budget, they were downgraded, and there is increasing pressure across the states and territories for similar suggested ratings movements,” he said. Mr Pitt admitted health spending was a growing concern across the country, but he said it was primarily due to the Commonwealth’s $80 billion in cuts to state health and education funding from 2017/18. “This budget foreshadows it will be an issue,” he added. But Opposition Leader Lawrence Springborg said the ratings agencies could see right through Labor’s budget and had noted its weaknesses, particularly the debt action plan, which Moody’s said was “mainly restructuring of the balance sheet”. “You can only kick the can down the road so far before the bank manager calls,” Mr Springborg told AAP.