NSW Faces $12B Shortfall, Risking AAA Credit Rating Amidst GST Revenue Crunch
April 22, 2024NSW Treasurer Daniel Mookhey has highlighted a forecasted $12 billion revenue shortfall for the state over four years.
The shortfall is attributed to a redistribution of GST revenue, which is said to disadvantage NSW more than the financial impact of COVID-19.
Mookhey emphasizes prioritizing NSW families over maintaining the state's AAA credit rating in the face of certain downgrade risks.
The revenue loss is equivalent to the potential employment of thousands of healthcare workers, teachers, or police officers.
A credit rating downgrade from AAA would increase the cost of borrowing for NSW, which is currently rated AAA by both Moody's and Fitch.
The Treasurer is advocating for a GST distribution based on population share, supplemented by federal government support for smaller states.
NSW is postponing the finalization of crucial funding agreements with the federal government to ensure better terms, particularly for public hospitals and schools.
Summary based on 5 sources
Get a daily email with more Australia News stories
Sources
The Guardian • Apr 21, 2024
Drop in GST revenue will cost NSW ‘more than Covid’, treasurer saysThe Sydney Morning Herald • Apr 21, 2024
GST carve-up costs NSW $12 billion – and its premium credit ratingThe Sydney Morning Herald • Apr 21, 2024
Impact of GST carve-up reveals urgent need to fix a bad systemThe Age • Apr 21, 2024
GST carve-up costs NSW $12 billion – and its premium credit rating