NSW & Victoria lose their AAA rating
Michael is joined by Terry McCrann, Business Commentator with The Australian, regarding Global credit ratings agency S&P downgrading NSW and Victoria’s AAA credit rating amid both states’ significant budget spending during the COVID lockdown.
‘If ever there was a good time to lose a AAA credit rating, it is right now’, writes Mr McCrann.
‘This is the soaring state debt – Victoria’s is going to $153bn, NSW’s ‘only’ to $104bn, and so NSW was downgraded only one notch to AA plus, while Victoria went down to notches to AA.’
‘There are three big reasons why in 2020 it’s not that big a deal – and certainly very, very different to when Victoria lost its AAA rating as the ‘rust-bucket state’ in the depths of the recession of the early 1990s.’
‘First off, almost literally EVERYONE in the world is in the same situation – running up huge government debt because of their own lockdowns and recessions.’
‘Second, interest rates are at all-but zero; and again low just about everywhere.’
‘Third, trillions of dollars of loose money is sloshing around the world, looking for somewhere to invest – to get a return or just to be safe.’
‘The one big question coming out of this is whether Australia’s AAA is next.’
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