A nice post from Chris Joye at Livewire:
I was recently asked whether it is really true that the AA and AAA rated state governments are having to pay materially more to raise capital to fund their budget deficits than Australia’s banks, which all have lower credit ratings—and in many cases substantially lower ratings in the higher risk BBB band (eg, Bank of Queensland, Bendigo, and ME Bank).
There is of course also the argument that the states are part of the federation and explicitly backed by it through revenue streams like the GST, whereas banks are less explicitly government guaranteed (they have a limited government guarantee of their deposits and various implicit guarantees).
