...Strong Institutional Framework: Fitch Ratings classifies the institutional framework for subnational entities in Australia as "strong" because of the entities' substantial disclosures, horizontal fiscal equalisation, transparency of information, and sophisticated borrowing vehicles. The subnationals are in a well-developed position compared with international peers. Extraordinary Support Expected: The Commonwealth government is under no obligation to assist the states in the event of financial difficulties. However, Fitch believes that the Commonwealth is likely to provide support to the states, mostly through debt guarantees. Exceptional Disclosure and Transparency: Fitch believes level of disclosure and transparency from the states is optimum, and compares favourably with international peers. States report a full accruals-based balance sheet, income statement, cash flow, along with four-year forecasts that set out revenue, expenditure, and debt projections ¡ updated continuously. All...
