Queensland

Queensland Credit Rating Falls for the First Time Since 2009

Shivangi

Sep 12, 2026 4:46 PM IST

Category Queensland

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Synopsis

Queensland’s credit rating has fallen from AA+ to AA as rising debt and major infrastructure spending ahead of the 2032 Olympics put pressure on the state budget.

Key Highlights

• The total treasurer debt of Queensland likely will be $216.47 billion over the next 5-years to reach $216.47b.
• S&P Global Ratings has downgraded Queensland from AA + to AA, Queensland’s first downgrade for over a decade since 2009.
• Queensland’s downgrade arrives as the state prepares for the 2032 Brisbane Olympics and plans to spend $119 billion over the next few years.
• Queensland pressure as inflation, wages, interest rates and a declining property market weigh on the budget

S&P Global Ratings has handed Queensland its first credit rating downgrade in 9 years, knocking the state from AA+ to AA. The agency linked its decision mainly to ongoing cash deficits and high outlays on infrastructure ahead of the Brisbane Olympics in 2032.

The state is preparing to spend $119 billion over the next few years as it gets ready for the games. Although the spending is intended to lay the groundwork for the Olympics, it puts further strain on the state’s finances.

Queensland is grappling with higher inflation, increased wages and interest rates and a softer property market. These factors are complicating the state’s ability to restore its finances.

How Big Is Queensland’s Debt?

The credit rating downgrade for Queensland arrives as debt in that state continues to rise. All this, adds to the worry of how much money the state would be left with on its financial obligations with total debt projected at $216.47 billion in 2029-30.

Ongoing infrastructure spending for the Olympics means Queensland is likely to keep running larger cash deficits than other AA+ rated authorities, S&P expected.

The agency predicts the state will end with a “razor thin” deficit in 2028 and a modest surplus the next year. Though better than deficits of between 5% and 6%, that would still be weaker than the stronger surpluses it previously expected, S&P said.

What Is Compounding The Problem With The Budget?

S&P added that property tax changes within the May federal government budget would erode Queensland’s stamp duty revenue. The report noted that cost-saving measures introduced in the state’s latest budget were minimal, as well.

As a result, Queensland has been left with an AA rating, below its former AA+ level. S&P recently reported that Queensland’s budgetary performance would remain extremely weak relative to other AA+ rated authorities over the next two to three years.

It’s also sparked a fight on the political front. Queensland Treasurer David Janetzki blamed the previous Labor government, which was voted out of office late 2024, as well as property tax changes by the federal Labor government. Federal Treasurer Jim Chalmers put the blame on what he called “fiscal mismanagement” by the LNP state government.

What It Means for Entrepreneurs

The lowering of Queensland AA by S&P is a lesson for everyone in regard to managing huge spending plans, especially small entrepreneurs. Queensland is pouring money into Olympic infrastructure, but Olympic spending can be a multi-year burden on state budgets.

This is a simple lesson for new business owners, growth can cost money but first businesses must know how much they can spend if they want to take expenses on. A plan that is quite expensive can become very difficult to fund when wages, interest rates and market conditions are weaker.

This also explains why business should budget-for-the-unexpected. Prepare yourself for not only the good but also hard times, control your expenses and ensure that making big lavish investments does not leave you with so little to meet other expenses.

Source: Capital Brief