SA's Triple AAA Credit Rating

[cruel_world00]

Nice to see the ol' rag not so negative.

http://www.adelaidenow.com.au/news/opin ... 6197259615

SOUTH Australia will very likely lose its long-cherished triple-A credit rating as the State Government finances major projects and revenue continues to erode.

Former premier Mike Rann and former treasurer Kevin Foley pursued the rating with vigour to establish Labor's economic credentials. The rating had a dual use in the early years of Mr Rann's government. It was both a political and economic weapon used to suppress demands for spending.

It allowed Mr Foley a plausible and convenient excuse to refuse proposals from colleagues in Cabinet. He could unblinkingly tell fellow ministers the program they desired could not be delivered for fear it would cost the state its reputation and drive up expenses.

It also was a political imperative for a Labor government which clung to power by the barest of margins and was haunted by the ghost of the State Bank collapse.

Mr Rann used the credit rating, a measure of the state's ability to pay back debt, as a de facto measure of the success of its entire Budget and economic strategy. It served the state well in those times and ensured a tight rein on spending.

The troubles the State Government faces in holding on to the rating now are twofold and unarguably partly of its own making.

Promises made on the run ahead of last year's election, including the Adelaide Oval and Southern Expressway developments, mean the state's expense sheet is at its limit.

However, the huge downturn in revenue from GST returns, the housing market and general economic activity are external factors over which state governments have limited control.

The question now becomes whether such spending on infrastructure at present is prudent. The answer can only be yes.

On the Government's figures, losing the triple-A rating will cost the Budget about $4 million per year.

The Adelaide Oval, Royal Adelaide Hospital and public transport upgrades such as the Southern Expressway are key to the state's future.

Keeping the triple-A rating should not be the state's only ambition. Nor should returning to surplus be the only measure of a Budget's success. Both are important measures of an economy's health. But they alone do not deliver a healthy economy.

If there is a choice to be made between stopping the state's big build or losing the financial imprimatur, progress must win.

The state is on the cusp of its second great advancement since settlement and must keep its eye on the prize. It will be sad to see the triple-A rating slide, but that should only be the end of the beginning of a significant era in the state's history.

[Will]

I completely agree with this article.

Sadly, for many people their grasp of good economic management is keeping interest rates low, budget surpluses and AAA credit ratings, and hence will not understand the strategic importance of losing our AAA credit rating.

[[Shuz]]

Fine by me, as long as the Government ensures that we regain the rating in 2-3 years time. Interest kills, and quite frankly, $4m per year is $4m too much. That money could help keep some of our smaller arts programs afloat.

[Wayno]

You can understand the Govts stance here. Why curb investment when we are expecting a big revenue kick in the near future from ODX. $4m a year is chicken feed compared to the figures being discussed. No one would blink an eye if the AO development ($500+m) cost an extra $30m, let alone all the other infrastructure work going on. Definitely a short term issue.

[[Shuz]]

No one would blink an eye if the AO development ($500+m) cost an extra $30m.

Seriously?

[monotonehell]

No one would blink an eye if the AO development ($500+m) cost an extra $30m.

Seriously?

A less than 10% blow out on a stadium project would be considered within budget, based on the history of stadia projects throughout the world.

[[Shuz]]

That's not my issue - my issue has and always will be the fact that the Government is spending $535m on a half-arsed shitty stadium design which makes it look like a giant toilet seat.

[Ben]

That's not my issue - my issue has and always will be the fact that the Government is spending $535m on a half-arsed shitty stadium design which makes it look like a giant toilet seat.

Which has a capacity smaller then the stadium they are bulldozing... but anyway. What can we do now? it's being built. We just need to look like a laughing stock for the next 20 or so years until a new one is built.

[Will]

That's not my issue - my issue has and always will be the fact that the Government is spending $535m on a half-arsed shitty stadium design which makes it look like a giant toilet seat.

Well then, would you agree that the MCG looks like this:



And Etihad looks like this:

[Will]

That's not my issue - my issue has and always will be the fact that the Government is spending $535m on a half-arsed shitty stadium design which makes it look like a giant toilet seat.

Which has a capacity smaller then the stadium they are bulldozing... but anyway. What can we do now? it's being built. We just need to look like a laughing stock for the next 20 or so years until a new one is built.

Who is laughing at us?

The reaction from interstate commentators has been overwhelmingly positive regarding the redevelopment of Adelaide Oval.

[[Shuz]]

Will, I'd hazard to say when it comes to our interstate folk, there's two types of reactions regarding Adelaide Oval.

One is the "Wow, something is actually being done/built/changing in Adelaide" kind of reaction. Vague, but enough to make us feel good about ourselves.

The other is the "Wow, that looks like shit, but any progress is still progress, right?" reaction. Harsh, but true - because of the second-rate mentality around here, it's like telling a three year old kid that their drawing of a house looks really pretty when it's just crayon scribbles all over the paper, The kid doesn't know it, but the adults do.

I'd venture to say that most 'interstate' commentators are saying the first thing, but are really thinking the second.

[crawf]

That's not my issue - my issue has and always will be the fact that the Government is spending $535m on a half-arsed shitty stadium design which makes it look like a giant toilet seat.

Well then, would you agree that the MCG looks like this:



And Etihad looks like this:

and AAMI Stadium

[Nathan]

Will, I'd hazard to say when it comes to our interstate folk, there's two types of reactions regarding Adelaide Oval.

One is the "Wow, something is actually being done/built/changing in Adelaide" kind of reaction. Vague, but enough to make us feel good about ourselves.

The other is the "Wow, that looks like shit, but any progress is still progress, right?" reaction. Harsh, but true - because of the second-rate mentality around here, it's like telling a three year old kid that their drawing of a house looks really pretty when it's just crayon scribbles all over the paper, The kid doesn't know it, but the adults do.

I'd venture to say that most 'interstate' commentators are saying the first thing, but are really thinking the second.

Rubbish. Talk about an inferiority complex.

[Will]

Will, I'd hazard to say when it comes to our interstate folk, there's two types of reactions regarding Adelaide Oval.

One is the "Wow, something is actually being done/built/changing in Adelaide" kind of reaction. Vague, but enough to make us feel good about ourselves.

The other is the "Wow, that looks like shit, but any progress is still progress, right?" reaction. Harsh, but true - because of the second-rate mentality around here, it's like telling a three year old kid that their drawing of a house looks really pretty when it's just crayon scribbles all over the paper, The kid doesn't know it, but the adults do.

I'd venture to say that most 'interstate' commentators are saying the first thing, but are really thinking the second.

The only second rate mentallity is the inferiority complex of many South Australians. This feeling that not matter what we do it "will never be good enough", and this feeling that interstate people come here to laugh at us. They may make the odd jibe, but in reality they don't care about what we do. They don't spend their time thinking about us. Only insecure South Australians feel they do.

Furthermore, I don't recall anyone thinking "wow that is shit" when the MCG was redeveloped or when the GABBA was redeveloped. So why would they think that for Adelaide Oval (oh, yeah that's right, because it's in Adelaide!)

[Wayno]

No one would blink an eye if the AO development ($500+m) cost an extra $30m.

Seriously?

A less than 10% blow out on a stadium project would be considered within budget, based on the history of stadia projects throughout the world.

what he said.

A few million bucks on extra loan payments is nothing compared to the scale of what's happening around town. White noise. Counter intuitively, delaying projects to keep the precious AAA rating would probably end up costing us more in the long run. Of course i wouldn't condone the continued spend in the absence of ODX, and neither would the govt.

Sorry to all for mentioning 'AO' in this thread - i should have realized the flurry of comments it would cause - lol.