Located in the southeast, Victoria is the second largest state in Australia. The state accounts for nearly 25% of Australia's output and, with about 5.2 million people, represents 25% of Australia's total population. The ratings on Victoria are supported by the state's strong balance sheet, diversified economy, ongoing fiscal discipline and strong system support. Victoria's balance sheet is strong. This provides it with the flexibility to increase debt without jeopardizing the rating. While the state's current policy favors partial debt-funding of its capital program, Victoria's debt levels are expected to remain consistent with the rating. Even after factoring in the state's increased debt, Victoria's balance sheet, including its unfunded superannuation liabilities, is expected to remain strong. The government's strong financial
