States “hide” infrastructure debt in asset recycling

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Nice work from Adam Creighton today:

One of the world’s biggest ratings agencies has questioned the NSW government’s finances, as new analysis reveals the nationwide ­infrastructure boom is pushing combined federal and state government debts towards the $1 trillion mark for the first time.

US ratings giant Moody’s called the widely praised NSW budget a “credit negative” this week, singling out “rising debt levels”. In its budget verdict, Moody’s contrasted 3.2 per cent average ­annual growth in expenses over the next four years with revenue growth of 2.5 per cent over the same period. “This imbalance would lead to growth in debt over the forecast period, challenging NSW’s credit profile,” it said.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.