Queensland's credit rating has been downgraded for the first time in almost 20 years. S&P Global Ratings confirmed on Friday it had lowered its "long-term issuer credit rating" on the state from AA+ — a grade Queensland had held since early 2009 — to AA, the ABC and Brisbane Times report. The agency's reasoning points squarely at the build-up to 2032: "Queensland's budgetary performance will remain weak over the next few years as the state ramps up its infrastructure spending, resulting in debt being structurally higher than in the past."
The numbers behind the cut are stark. The Crisafulli government's June budget forecast deficits in each of the three coming financial years, with debt climbing from more than $142 billion to almost $216.5 billion by mid-2030 — and the state already expected to be paying $7.7 billion a year by 2030 just to service it. A downgrade pushes interest costs higher still. "Persistent inflation, rising interest rates, higher wages, and softening property market sentiment will likely weigh on Queensland's budgetary outcomes and fiscal recovery over the next two to three years," S&P said.
Stable outlook, sharp warnings
The new AA rating comes with a stable outlook — an improvement on the negative outlook S&P attached to its February research update, which had forecast operating deficits before a recovery by fiscal 2028, with debt rising steadily "but remain[ing] lower than most Australian states".
The agency spelled out both doors from here: the rating falls further "if its financial management weakens", driving "persistent operating deficits and wider deficits after capital accounts, and substantially higher debt" — or rises again if the state "runs sustained operating surpluses and narrower deficits after capital accounts on a continued basis". The infrastructure bill it references includes projects like Cross River Rail, the state's largest ever.
Two treasurers, two stories
State Treasurer David Janetzki has said consistently since the LNP came to government in 2024 that a downgrade was likely, and in a statement on Thursday blamed the former Labor government and the impacts of the latest federal budget. Canberra rejects its share of that. Speaking on 612 ABC Brisbane before the announcement, Federal Treasurer Jim Chalmers — who told federal parliament on Thursday the downgrade risk was "very troubling" — said the Commonwealth had been "piling billions and billions of extra dollars" into the state. "Every budget around Australia, including certainly the Commonwealth budget, is under pressure for one reason or another," he said. "But the Queensland budget is not under pressure because of the Commonwealth."
Wherever the blame settles, the mechanics don't move: a lower rating makes every dollar of Queensland's borrowing — tracked by Queensland Treasury — more expensive to raise, at precisely the moment the state is borrowing more than it ever has. The AA+ badge took almost two decades to lose; the record of the next few budgets will decide how long it takes to win back.