Government financing

Extract: Over the past decade the evaluation of state government financial performance under successive administrations has been dominated by a view that it has been necessary under all circumstances to deliver a surplus and maintain a AAA credit rating. This view has recently come under challenge, creating a space for a healthy debate about the relative merits of credit ratings as a measure of the success or otherwise of government financial administration. Under the stewardship of former Treasurer Kevin Foley the state government's rationale for maintenance of the AAA rating was to minimise the servicing costs of outstanding debt and to demonstrate that the South Australian government was a responsible financial manager in the wake of the State Bank crisis. With the passing of time the maintenance of a AAA rating was elevated to a necessity, the key standard by which the health of the state was unfortunately to be measured. This view prevailed till 2009 when cracks began to appear in the political consensus on credit ratings.