Ms O’CONNOR – Sure. Well, I’m interested to know whether there’s been any contact with government from credit rating agencies given that –
CHAIR – That’s under a different line item. We will come to that ‑ 1.3.
Ms O’CONNOR – Well, it’s also budget development and management –
Mr ABETZ – I can try to answer that now. Yes, there has been. I’ve appeared before both Moody’s and Standard & Poor’s, as has Treasury –
Ms O’CONNOR – When was that, sorry?
Mr ABETZ – That would have been last month? Was it October?
Mr SWAIN – The most recent interaction was with Treasury.
Mr ABETZ – With Treasury, yes.
Mr SWAIN – Which was the day – I’m just trying to revisit – after the Budget, day before?
Mr SWAIN – The day before where we did presentations on the Budget to both Moody’s and S&P and just walked them through what would be likely to be in the Budget.
Ms O’CONNOR – Was there any, and we will get to this, but was there any indication that they were looking to downgrade us further, given that we’re the one state in the country that has a negative credit rating?
Mr SWAIN – Both were on –
Mr ABETZ – They were on negative watch.
CHAIR – None says negative in your budget papers.
Ms O’CONNOR – It says negative in the Budget.
Mr SWAIN – We’re on negative watch with both S&P and Moody’s, and they do have concerns in relation to the level of debt and the level of expenditure that is going to debt repayments. That is evident –
Ms O’CONNOR – And borrowing to pay for borrowings.
Mr SWAIN – That is evident in them putting the state on negative watch.
CHAIR – Can I just clarify that point, Cassy? Because in the 2024-25 Budget it was stable, and in the 2025-26 Budget it’s negative. You say you’re on negative watch, but the recording in the budget papers has gone from stable in 2024-25 to negative. So, you’re saying that they’re on negative watch with a negative rating? Is that what you’re saying? Because that’s what your budget papers say.
Ms O’CONNOR – But we are doubly negative.
Mr ABETZ – Yes.
CHAIR – So, we’re already on negative?
Mr SWAIN – We’re on negative watch. We are.
CHAIR – On negative watch, on negative? Correct?
Mr GOURLAY – I’m not sure what that terminology means, but we’ve got our rating and our outlook is negative.
Mr ABETZ – That’s the state A2 [inaudible]
CHAIR – Right. So, we’ve got a negative rating with a negative outlook.
Mr SWAIN – There’s only one negative.
Mr ABETZ – Two negatives make a positive, hah.
Ms O’CONNOR – Oh, I’m sure. Can I just ask, did you happen, Treasurer, to read the article in The Sydney Morning Herald and The Age a couple of weeks ago by journalist Shane Wright, who painted a really –
Mr ABETZ – Yes, by Shane Wright. Yes. Great headline –
Ms O’CONNOR – Well, it painted a really alarming picture of a state that’s essentially on the brink of bankruptcy. I mean, there was some talk in the article of federal bailouts. I mean, how close to the reality is that assessment? We’re now in the national media as a sort of nearly bankrupt state, and you want to build a multibillion dollar stadium? It just doesn’t add up.
Mr ABETZ – Well, it comes back to the stadium.
Ms O’CONNOR – In many ways it does, because it’s emblematic of your government’s recklessness.
Mr ABETZ – Good luck to them. We then have other people saying killing the stadium will do little to fix the debt, which is an editorial, so –
Ms O’CONNOR – An editorial in the Mercury, which is –
CHAIR – No, that was in The Advocate. But he’s right…
Mr ABETZ – No, in The Advocate. In the north-west, you see – the Chair’s home territory.
Ms O’CONNOR – Okay, sure. The great economic analysis of The Advocate newspaper ‑
Mr ABETZ – It was an opinion. It was an opinion of Shane Wright and the Fairfax papers, who seem to have a particular view of the world, but I can assure you –
Ms O’CONNOR – Based on the numbers before them.
Mr ABETZ – But I can assure you that we are not in a position of needing a bailout. It was a cheap headline. Good luck to them, et cetera. But, if the federal government, in coming back to this – if they were to fund health as they had promised, things would be somewhat better.
Ms O’CONNOR – So, there’s nearly $610 million allocated in this year’s Budget towards the stadium. Shortfall in health is identified in the budget papers as being around $640 million. So, two quite similar numbers.
Mr ABETZ – It is spread out over a number of years over the forward Estimates, that amount, and I accept that. But on top of that, of course, if we don’t go ahead, we miss out on the AFL’s 360, just as an example.
Mr SWAIN – Can I just provide a bit of context? Just important that on Moody’s and S&P, with the third- and second-highest rating possible in relation to S&P, we are the same as Queensland and New South Wales, and like all states and –
Ms O’CONNOR – Same what?
Mr ABETZ – Rating category.
Mr SWAIN – The same rating. And in relation to the broader context of securing debt, the states and territories are all supported by the AAA rating of the Commonwealth, which is one of nine in the world. You know, we’re still – we are in the position of having a rating or ratings that are under pressure but offer a very strong starting point.
Ms O’CONNOR – Thank you.
Could I ask, Treasurer: if you accept the basic premise that to build a stadium funded by borrowings ultimately means service cuts, and that’s what the Planning Commission has made really clear. So, it’s about the choices that are manifest in this Budget – the blank lines in the out years, the underfunded agencies. Do you accept the basic reality that to build a stadium at public cost, apart from debt servicing costs, means that governments in the future will need to make choices, and those choices will lead to service cuts.
Mr ABETZ – No, I don’t. Any infrastructure project that we engage in will incur public expenditure. There’s no doubt about that.
Ms O’CONNOR – At this scale, though?
Mr ABETZ – It will be an infrastructure project that will be an economic enabler. It will assist in a whole host of areas for our economy. It will provide confidence and self-esteem, and people will know that Tasmania is a place where you can invest. We will have at least one, if not two, new hotels being built on the back of stadium approval. It’s those sorts of extra enablers that cannot be overlooked in all this.
Might I add that, in the forward Estimates, this year it’s a relatively small amount, then there’s next year, and it builds up to the big build. Do we ask those questions about the Brighton School or the Legana School or the Bridgewater –
Ms O’CONNOR – The Bridgewater infrastructure, necessary critical infrastructure, versus a stadium; our third one?
Mr ABETZ – As you well know, and all the experts have told you, that if you want the anchor tenet for the stadium, which makes it stack up – and the stadium is multipurpose, it will be of benefit for a whole range of activities – but you need an anchor tenant; the AFL has said quite clearly that either Bellerive or York Park cannot and will not be sufficient for an actual home base.
Ms O’CONNOR – It’s not the view of the AFL Task Force. Can I just ask the final question on this line of questioning, Chair? When the Tasmanian Planning Commission final report came out, based on a costing at that time estimated at $945 million, the Premier on that same day, I think, came back and said our new projected cost is $1.13 billion to construct the stadium. That’s now a couple of months ago, and those costs will have risen. Have there been any new costings requested or undertaken so that Treasury and you, as Treasurer, have a more realistic picture of what it might cost to construct our third stadium?
Mr ABETZ – You should be asking that later this afternoon with the Macquarie Point Development, but –
Ms O’CONNOR – You’re the Treasurer.
Mr ABETZ – I’m aware of that. Thank you for reminding me. That’s very helpful.
Ms O’CONNOR – Why would we ask a GBE?
Mr ABETZ – Because they’re the ones that have done the costings that were then provided to government.
Ms O’CONNOR – And the last ones for $1.13 billion, were they?
Mr ABETZ – That’s right, and there is contingency built into that. They’ve also indicated the cost of delaying the project; how that has and will continue to increase the cost, but that has now been, with contingency, factored in. These things are never absolutely certain, like the building of a bridge or a school –
Ms O’CONNOR – It is certain that the cost of it will increase.
Mr ABETZ – Well, that’s your assertion, and time will tell.
Ms O’CONNOR – No, it’s just rational.
