Budget Deficit and High Debt See ACT’s Credit Rating Downgraded to AA
The Australian Capital Territory (ACT) has suffered a financial blow with its credit rating downgraded from AAA to AA by a leading global ratings agency, citing persistent budget deficits and a proportionally high debt burden.
The downgrade marks a significant shift for the ACT, which had previously enjoyed the highest possible credit rating thanks to sound fiscal management and strong economic fundamentals. However, the ratings agency flagged ongoing structural deficits and rising debt-to-revenue ratios as major concerns for the territory’s long-term financial sustainability.
According to the agency’s report, the ACT government has consistently posted budget deficits over the past several years, compounded by increased spending on health, infrastructure, and social services. While these investments were aimed at population growth and economic resilience, they have pushed the territory’s net debt to historically high levels relative to its size.
“The ACT’s debt profile has reached a point where its capacity to absorb future economic shocks is diminished,” the report stated. “Unless fiscal repair measures are introduced, the current trajectory poses risks to financial flexibility.”
Treasurer Andrew Barr acknowledged the downgrade but defended the government’s fiscal strategy, noting that the investments were essential for long-term growth. “We are building the infrastructure and services needed for a growing Canberra,” Barr said. “While the downgrade is disappointing, it reflects the same pressures faced by jurisdictions across Australia.”
The downgrade could lead to increased borrowing costs for the territory, placing further pressure on future budgets. Analysts warn that unless the ACT undertakes meaningful fiscal consolidation or revenue reform, further downgrades could be on the horizon.
Despite the setback, the AA rating still reflects a strong credit profile, and the government remains committed to returning to surplus over the medium term.
Alan Joyce Collects $3.8 Million Payout in Final Qantas Bonus
Former Qantas CEO Alan Joyce has received a final bonus payout of $3.8 million, sparking renewed criticism amid lingering public and political anger over the airline’s post-pandemic performance and treatment of staff and customers.
The bonus, part of a long-term incentive package, was disclosed in Qantas’ latest annual report released Friday. It comes a year after Joyce abruptly stepped down in September 2023, ahead of a scheduled retirement, amid a wave of scandals including customer service failures, flight cancellations, and the controversial sale of tickets for flights that had already been cancelled.
While Qantas noted that the payout was significantly reduced from its potential maximum due to performance metrics not being fully met, critics argue the multimillion-dollar payment remains excessive. Labor Senator Tony Sheldon called the payout “a slap in the face to Qantas workers and passengers who endured the worst of the airline’s mismanagement.”
Under Joyce’s 15-year tenure, Qantas saw periods of strong profitability and aggressive cost-cutting, but his legacy has been clouded by recent turbulence. The airline has faced legal action from the ACCC, workforce disputes over outsourcing, and a dramatic fall in customer trust.
Qantas defended the payment, stating that it reflected long-term shareholder value creation and was consistent with Joyce’s contractual entitlements. “Mr. Joyce’s remuneration was subject to rigorous assessment against financial and non-financial targets over several years,” the airline said.
Joyce, who has kept a low profile since his departure, has not commented publicly on the bonus.
The payout comes as new CEO Vanessa Hudson attempts to rebuild Qantas’ reputation and navigate increasing regulatory scrutiny, with the airline pledging greater transparency and improved service delivery in the wake of its troubled recent history.
ASX Gains as Global Interest Rate Fears Subside
The Australian share market surged today as easing concerns over global interest rate hikes buoyed investor sentiment. The S&P/ASX 200 index climbed 1.2%, gaining 106 points to close at 8,770 — just shy of its record high — while the broader All Ordinaries also posted strong gains.
The rally followed a positive lead from Wall Street, where growing expectations of a U.S. interest rate cut in the coming months lifted global markets. Investors are increasingly confident that inflation is moderating, allowing central banks to begin easing monetary policy without jeopardising economic stability.
Locally, nearly all sectors finished in the green, with consumer discretionary and financial stocks leading the gains. Major banks, including NAB, ANZ, and Commonwealth Bank, rose as lower rate expectations improved the outlook for borrowing and lending activity. Retail and industrial companies also benefited from hopes of stronger consumer spending and business investment.
Resource stocks had a particularly strong day, with rare earth producers among the top performers. Companies like Iluka Resources and Lynas Rare Earths saw sharp share price increases, driven by both stronger commodity prices and renewed global demand.
Tech and property stocks, which are sensitive to interest rate movements, also gained solid ground. Investors welcomed the potential for lower borrowing costs to support valuations and investment in these sectors.
The positive momentum marks a shift from recent months, where persistent rate hikes and inflation fears weighed on equity markets. While caution remains, especially ahead of upcoming inflation data and central bank meetings, today’s rally signals renewed confidence in the market’s direction.
Analysts say sustained optimism will depend on further evidence that inflation is under control and that monetary policy will become more supportive in the near term. For now, investors are embracing the possibility of a soft landing.
ACCC Raises Major Concerns Over Sale of RACWA to IAG
The Australian Competition and Consumer Commission (ACCC) has raised significant concerns over Insurance Australia Group’s (IAG) proposed acquisition of RACWA’s insurance business, warning that the $1.35 billion deal could substantially reduce competition in Western Australia’s insurance market.
RAC Insurance is currently one of the largest and most trusted insurers in the state, with a dominant position in both motor and home insurance. The ACCC fears that if IAG — already a major player through brands like NRMA and CGU — takes over, it could lead to higher premiums, reduced service quality, and fewer choices for consumers.
One of the key issues highlighted by the regulator is the potential for IAG to control access to critical repair services, such as vehicle repairs and home restoration providers. The ACCC is concerned that this could harm independent repairers and limit the ability of rival insurers to compete fairly, ultimately leading to higher costs for consumers.
There are also fears that the deal could mislead policyholders into thinking they are still dealing with a community-focused insurer, when in reality, control would shift to a corporate giant with different priorities.
The ACCC has opened the proposal to public submissions, allowing individuals and industry stakeholders to voice their opinions before a final decision is made in late November. IAG has indicated it will work with the regulator to address concerns and argues the acquisition would strengthen its presence in Western Australia and improve customer outcomes.
However, industry bodies and consumer advocates have already expressed alarm, warning that the move could weaken competition and reduce long-term benefits for policyholders. The regulator’s final decision could set an important precedent for future mergers in the financial services sector.
Supercare Dental and Cosmetics Tuggerah Leaves Patients Out of Pocket by Over $2 Million
Supercare Dental and Cosmetics’ Tuggerah clinic has plunged into liquidation, leaving former patients owed more than $2 million for dental work that remains unfinished. The latest report to creditors reveals there are nearly 330 unsecured claims totaling close to $2.8 million—of which over $2.1 million were advance payments from patients anticipating completion of services.
The collapse has devastated many, often those who drained their superannuation to fund treatment. One 60-year-old patient withdrew over $56,000 from her retirement savings, only to receive a few dental crowns that she describes as “ugly,” leaving her self-conscious and financially strained. Many others are similarly left with incomplete implant work, broken fittings, or no teeth at all.
Liquidation proceedings have uncovered worrying signs of financial mismanagement. The director is under scrutiny for allegedly transferring substantial sums—over $8 million—from the company to herself and related entities, raising potential breaches of directors’ duties. Regulatory authorities, including NSW Fair Trading, allege possible violations of consumer laws by the director, her husband, and the business.
With the company insolvent and lacking sufficient assets, the liquidator has warned that it is highly unlikely that any compensation or dividend will be paid to these unsecured creditors—including patients and former staff who are owed wages and entitlements.
Adding to the distress, many patients cannot access their dental records, complicating efforts to seek alternative treatment elsewhere. While new clinics have taken over some premises, they explicitly declined to assume responsibility for records or debts, offering only clinical advice on a case-by-case basis.
As the liquidation process unfolds over the next 6 to 12 months, patient groups are calling attention to the broader issues—highlighting how aggressive marketing, misleading access to superannuation for cosmetic treatments, and poor corporate oversight can inflict immense physical, emotional, and financial harm on vulnerable Australians.
