S&P Global has advised the Victorian government that its credit rating will not be downgraded from ‘AA’, as it has been assured by the government that it will “control operating costs ahead of the 2026 election, deliver promised cost savings, and slow growth in debt”.
However, S&P noted that the Victorian government’s financial management has lagged “those of many highly rated domestic and international peers” and that “the state tends to spend all unexpected revenue gains that it receives and has struggled to implement previous savings targets, including workforce reductions”.
S&P also warned of an “elevated risk” that the flagship Suburban Rail Loop project will cost more than the government has forecast, forcing a ratings downgrade:
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