Queensland’s credit rating has been downgraded for the first time since 2009, increasing pressure on the state’s finances as debt is forecast to exceed A$216 billion by 2029-30.
S&P Global Ratings has cut Queensland’s long-term rating from AA+ to AA, while assigning a stable outlook. The decision is expected to increase the cost of borrowing for the state as it funds a major infrastructure programme and prepares for the 2032 Olympic and Paralympic Games.
Queensland Treasury Corporation’s latest figures show interest payments are expected to reach A$6.83 billion in the current financial year and rise to almost A$11 billion by 2029-30.
The projected interest bill would exceed the A$7.1 billion funding envelope allocated for infrastructure associated with the Brisbane Olympics and Paralympics.
S&P had placed Queensland’s AA+ rating on a negative outlook in February 2025, citing weak budgetary performance, a large infrastructure pipeline and rising debt. The agency’s stable outlook following the downgrade reflects an expectation that the state’s financial position will remain under pressure as infrastructure spending increases.
Queensland Treasurer David Janetzki has blamed the former Labor government for leaving the state on course for a downgrade, while also criticising decisions made by the federal government.
“After a decade of fiscal vandalism under the former state Labor government which left Queensland on track for a credit rating downgrade, Queenslanders are now also paying the price for Jim Chalmers’ budget decisions,” Mr Janetzki said.
Federal Treasurer Jim Chalmers said he was concerned about the deterioration in Queensland’s finances despite what he described as increased Commonwealth support for the state.
The downgrade casts doubt on the Queensland government’s plan to return the budget to surplus by 2029-30. It also threatens to leave less money available for public services unless ministers reduce spending, increase revenue or accept larger deficits.
Moody’s continues to rate Queensland Aa1 with a stable outlook, according to Queensland Treasury Corporation.
