Is the Credit Rating Tail Wagging the Budgetary Dog? Preliminary Analysis of the South Australian Budget 2010-11
John Spoehr & Barry Burgan, Univeristy of Adelaide and with assistance from Julian Morrison & Lisa Rippin, EconSearch
Australian Institute for Social Research, University of Adelaide
Prepared for the Public Service Association, this report provides the results of a preliminary analysis of the direct and indirect employment and economic impact of the South Australian Budget.
The reports highlights that while the benefits of a AAA Credit Rating are not insignificant they should not be overestimated. In addition, the report finds the Budget cuts are likely to have a disproportionate impact in regional areas, and also upon women who are over-represented in employment in administrative and financial services roles within the public sector.
Expenditure cuts of the magnitude of those in the State Budget are a high price to pay for the modest financial benefits that flow from a AAA credit rating, particularly when it was apparent prior to the State Budget that there was no realistic prospect of a credit rating downgrade for South Australia.