S&P affirms Tasmania

Standard & Poor's said it affirmed its AA+/A-1+ issuer credit rating on the State of Tasmania.

The outlook is stable.

The ratings on the state's central financing authority, Tasmanian Public Finance Corp., which operates with the benefit of a state government guarantee, were affirmed at AA+.

S&P said the ratings on Tasmania reflect a track record of very strong fiscal balances, which have led to a falling stock of debt for the general government. These achievements have been set against a backdrop of a disciplined medium-term fiscal framework.

Although the supportive financial arrangements between the federal and state government is a positive rating factor, there is imbalance between the state's revenue and expenditure responsibilities. Also, Tasmania's large, capital-intensive and government guaranteed trading enterprise sector, narrow economic structure and pressures on operating expenditure in the next few years constrain the ratings, the agency said.

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