A predicted return to surplus in the Victorian and NSW budgets will be knocked off course by more interest rate rises, a leading credit agency says.
Moody's Investors Service has singled out Australia's two most populous states in a new report, sounding the alarm about the impact of rising healthcare spending, soaring inflation and a weakening housing market.
John Manning, vice president of the service, said the housing market downturn would lower stamp duty revenue and largely offset stronger GST, payroll tax and mining royalty collections.
