The 2020-21 Budget demonstrated the Government’s commitment to supporting business, families, and the community through the once-in-a-generation COVID-19 pandemic. This support has cushioned the economic impact of COVID-19 in New South Wales. However, COVID-19 has resulted in large operating deficits and a significant increase in projected State borrowings.

Following the release of the 2020-21 Budget, the State’s credit rating was reviewed by both Moody’s and S&P Global. In December 2020, Moody’s reaffirmed a triple-A credit rating for New South Wales while noting the State’s proven history of strong fiscal management.

In December 2020, S&P Global lowered the State’s credit rating by one notch from triple-A to double-A plus, noting that the State’s increase in debt was not consistent with S&P’s assessment of a triple-A credit rating. S&P did note that the State still maintained a wealthy and diversified economy, excellent financial management, and exceptional liquidity.

Supported by the NSW Generations Fund and the Government’s asset recycling program, the State is on track for an operating surplus and net debt levels to stabilise over the medium-term. This will see the fiscal outlook progressively return to a position more consistent with S&P’s view of a triple-A credit rating.

The object of the Fiscal Responsibility Act, 2012 (FRA) is to maintain a triple-A credit rating. As per the FRA, the Government will report back as part of future budgets in relation to its plan to regain the S&P triple-A credit rating.


Learn more about credit ratings

A credit rating is a measure of how risky a borrower is (the borrower’s expected willingness and capacity to repay any debt on time). Types of entities may include but are not limited to, an individual, country, state, city, or company.  Ratings vary according to the type of debt instrument (and its terms and conditions), as well as the borrower’s credit profile.

Higher credit ratings may lower the cost of borrowing and assist an entity in accessing financial markets.

For Government entities, the highest possible ratings are Aaa (Moody’s) and AAA (Standard & Poor’s). The lowest are C (Moody’s) and D (Standard & Poor’s).

Last updated: 08/07/2021