Fitch Affirms Queensland's Ratings; Outlook Stable.
NEW YORK New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of & LONDON & BRISBANE---(BUSINESS WIRE)--Jan. 14, 2003
Fitch Ratings Fitch Ratings
An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. , the international rating agency, has affirmed the State of Queensland's Long- and Short-term local currency ratings of 'AAA' and 'F1+', respectively. The 'AA' Long-term and 'F1+' Short-term foreign currency ratings are also affirmed and the Rating Outlook remains Stable. The ratings are based on Queensland's sound economic fabric and net debt position, with liquid investments exceeding indebtedness. Nevertheless, Fitch expects the administration to meet its forecast of a reduction in the overall deficit, after capital expenditure, and to be in surplus by 2006. The policy commitment to maintain an overall operating surplus Operating surplus is an accounting concept used in national accounts statistics (such as United Nations System of National Accounts (UNSNA) and in corporate and government accounts. It is also used in macro-economics as a proxy for total pre-tax profit income. should lead to continued strong fiscal and financial discipline.
Queensland has consistently recorded stronger annual economic growth than Australia as a whole and has narrowed its historical GDP gap GDP Gap
The forfeited output of an country's economy resulting from the failure to create sufficient jobs for all those willing to work.
A GDP gap denotes the amount of production that is irretrievably lost. with the rest of the country, with some sectors being particularly dynamic. Traditionally, Queensland has had a greater focus on mining and agriculture than the rest of Australia. Nevertheless, its main sector is services, and this is underpinned by tourism and related activities. Although declining, Queensland's unemployment rate remains higher than the national figure, in part for demographic reasons.
Traditionally, Queensland has achieved good fiscal performance, demonstrated by its sound operating surpluses and high level of internally funded capital expenditure. Nevertheless, the current balance has been declining in the past three years and the downward trend can be attributed to two main factors -- the liability of the state for the collapse of HIH Insurance HIH Insurance was Australia's second largest insurance company, which was placed into provisional liquidation on 15 March 2001. The demise of HIH is considered be the largest corporate collapse in Australia's history, with liquidators estimating that HIH's losses totalled up to $5. (impacting 2001 results) and negative returns on its financial assets Financial assets
Claims on real assets. (2002). Queensland is the only Australian state to have fully funded its accrued liabilities, such as its superannuation Superannuation
An organizational pension program created by companies for the benefit of their employees.
Funds deposited in a superannuation account will typically grow without any tax implications until retirement or withdrawal. scheme, and holds a diversified portfolio, including equities, to meet these liabilities. The state's major functional areas of operating expenditure are education and health, but the wider public sector includes a number of Public Trading Enterprises (PTE PTE
The ISO 4217 currency code for the Portugese Escudo. ) that are involved in areas such as energy and rail. These entities provide dividend and tax equivalent payments, but also receive transfers from the state.
The debt level of the General Government is low in relation to current revenue, but this increases considerably when the indebtedness of the PTEs is included. However, because investment exceeds liabilities, Queensland reports a negative net debt situation. The state also guarantees the liabilities of its Treasury Corporation, which acts as a finance vehicle not only for the state and the PTEs but also for the local governments in Queensland. Therefore the contingent liability Contingent Liability
1. The possibility of an obligation to pay certain sums dependent on future events.
2. Defined obligations by a company that must be met, but the probability of payment is minimal.
1. from the Treasury Corporation is sizeable.
One of the six Australian states, Queensland has the second largest land area and with a population of around 3.7 million it is third largest by this measure in the country.