The federal and Queensland treasurers are pointing the finger at one another over an impending downgrade to the Sunshine State’s credit rating, which will heap more borrowing costs on its already-straining budget.
Queensland Treasurer David Janetzki all but confirmed on Friday morning the state was set to lose its AA+ rating with credit agency S&P Global.
Since taking control of the state’s coffers in October 2024, Mr Janetzki has warned a downgrade was inevitable due to the previous Labor government’s “fiscal vandalism”.
He also stepped up criticism of the federal government, including its tax changes in the May budget, which have contributed to a housing downturn.
Lower house prices have hit Queensland’s stamp duty revenue to the tune $223 million in the first two months of the financial year, which Mr Janetzki said would result in around a billion dollars in reduced revenue in 2026/27.
“Then there’s (federal treasurer) Jim Chalmers’ cost shifting: NDIS, stranded Australians, natural disaster funding. So there is a clear range of problems that we have that the federal government has failed to appropriately fund,” Mr Janetzki told reporters.
In a separate broadside on his fellow banana bender, Dr Chalmers said Queensland had done very well out of the Commonwealth government under Labor.
Stamp duty had soared 58 per cent in Queensland in the last two years, he said, while GST payments from the federal government were almost $20 billion this year, up $2.6 billion compared to the year prior.
“State Treasurer David Janetzki is getting billions more in Commonwealth support, billions more in stamp duty and GST, and billions more in coal royalties,” Dr Chalmers said in a statement.
“At the same time, he has been softening Queenslanders up and telling them that a credit downgrade is ‘inevitable’.
“That’s a damning indictment on the Queensland government’s economic credibility after almost two years in charge of the coffers.
“A credit downgrade risks higher debt costs and less money for the services Queenslanders deserve.
“David Janetzki has some real questions to answer.”
S&P declined to comment on whether a rating change was in the works.
In a June report, the agency reaffirmed Queensland’s negative rating outlook, reflecting the state’s structurally weaker finances following its latest budget.
The report warned rising public sector wages and health services costs risked delaying the state’s recovery.
“Downward rating pressure may arise if Queensland delays its return to operating surpluses, or if higher infrastructure spending drives up overall cash deficits and debt,” S&P said at the time.
Queensland’s budget forecast a deficit of $6.2 billion in 2026/27, with gross debt projected to exceed $200 billion by 2028/29.
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