See also "Treasurer talks tax rises, job cuts" in SMH of 13 Oct 08, "Tax hike risk if NSW remains in the red" in the Australian of 12 Oct 08.
NSW Greens Media Release: 14 October 2008
The reliability of the companies behind the state's AAA credit rating has been called into question before a NSW Legislative Council budget estimates committee today.
Standard and Poor's and Moody's have been heavily implicated in the subprime mortgage crisis, according to Greens NSW MP John Kaye.
Dr Kaye said: "They rated many Collateralised Debt Obligations based on highly unreliable mortgages as AAA.
"NSW Treasurer Eric Roozendaal is relying on Standard and Poor's and Moody's to justify a slash and burn mini-budget despite their fingerprints being all over the current global financial meltdown.
"Treasurer Roozendaal laughed off concern about Standard and Poor's and Moody's track record with Iceland and the CDOs.
"A fortnight ago Moody's rated Iceland Aa1.
"Since then the Icelandic financial system has collapsed and Britain has been forced to step in to guarantee bank deposits.
"NSW pays Standard and Poor's and Moody's for the privilege of being rated in what is effectively a ‘cash for comment' arrangement.
"The one unpaid credit agency, Fitch, rates NSW as AA+, one down from AAA.
"Cutting spending on services and infrastructure at a time when the state is experiencing negative growth will undermine the Federal Government's stimulus package.
"It is a recipe to throw the state into recession," Dr Kaye said.
For more information: John Kaye 0407 195 455
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