Mrs PRICE - 2012-11-27
Can you advise the House about the reference made by the independent rating agency, Moody’s, to the Power and Water Corporation and its impact on the Northern Territory’s financial position?
ANSWER
Madam Speaker, I thank the member for her question. Moody’s assessment of the Northern Territory is critical to the financial prospects and future of all Territorians. Moody’s has been providing expertise in credit ratings for over 100 years and has being rating the Northern Territory government since 1997.
If I could explain for the benefit of the House, and in particular for the member for Karama, Moody’s Investors Service provides international financial research on bonds issued by commercial and government entities. The research determines what level of interest a government pays on its borrowings. In extreme cases, a bad Moody’s rating might mean a corporation or government would find it impossible to borrow money. In January this year, Moody’s gave a very simple message to the then Northern Territory Labor government: action was needed to fix the Power and Water Corporation. It was a very clear message, one the former Labor government did not comprehend, want to hear, or was unable to act upon despite being able to hear or comprehend.
Supporting an unprofitable power and water business has put a significant strain on the budget and the Territory’s debt position. This is the message Moody’s gave the former Northern Territory Labor government. Moody’s stated and I quote:
They were able to identify the state of the financial …
Ms LAWRIE: A point of order, Madam Speaker! Moody’s rated the Territory AA-plus with a stable outlook.
Madam SPEAKER: Leader of the Opposition please be seated. There is no point of order.
Mrs LAMBLEY: Moody’s went further and forecast projections for the Northern Territory government if Power and Water were not allowed to return to a self-supporting operation. Those projections ominously forecast the debt burden would be pushed to 113% of government revenues by 2014-15: an unsustainable situation.
That message was given to the former Labor government and what did it do about it? Absolutely nothing! They sit in opposition, which is exactly where they should be, telling us how to run our affairs, how we should behave and what decisions we should not make in government.
They failed Madam Speaker, they mismanaged Power and Water Corporation and now we are looking …
Madam SPEAKER: Minister, your time has expired.
ANSWER
Madam Speaker, I thank the member for her question. Moody’s assessment of the Northern Territory is critical to the financial prospects and future of all Territorians. Moody’s has been providing expertise in credit ratings for over 100 years and has being rating the Northern Territory government since 1997.
If I could explain for the benefit of the House, and in particular for the member for Karama, Moody’s Investors Service provides international financial research on bonds issued by commercial and government entities. The research determines what level of interest a government pays on its borrowings. In extreme cases, a bad Moody’s rating might mean a corporation or government would find it impossible to borrow money. In January this year, Moody’s gave a very simple message to the then Northern Territory Labor government: action was needed to fix the Power and Water Corporation. It was a very clear message, one the former Labor government did not comprehend, want to hear, or was unable to act upon despite being able to hear or comprehend.
Supporting an unprofitable power and water business has put a significant strain on the budget and the Territory’s debt position. This is the message Moody’s gave the former Northern Territory Labor government. Moody’s stated and I quote:
- ... a ramp up in capital spending and weakening in the Territory-owned Power and Water Company’s operations, in the context of slower revenue growth have led to the emergence of large deficits and an increase in the debt burden.
They were able to identify the state of the financial …
Ms LAWRIE: A point of order, Madam Speaker! Moody’s rated the Territory AA-plus with a stable outlook.
Madam SPEAKER: Leader of the Opposition please be seated. There is no point of order.
Mrs LAMBLEY: Moody’s went further and forecast projections for the Northern Territory government if Power and Water were not allowed to return to a self-supporting operation. Those projections ominously forecast the debt burden would be pushed to 113% of government revenues by 2014-15: an unsustainable situation.
That message was given to the former Labor government and what did it do about it? Absolutely nothing! They sit in opposition, which is exactly where they should be, telling us how to run our affairs, how we should behave and what decisions we should not make in government.
They failed Madam Speaker, they mismanaged Power and Water Corporation and now we are looking …
Madam SPEAKER: Minister, your time has expired.
Last updated: 09 Aug 2016