The ratings on the State of Victoria reflect its very low level of financial liabilities, strong ongoing budgetary performance, and a prudent approach to fiscal management. The foreign currency rating reflects the sovereign credit risks associated with the 'AA+' foreign currency rating on the Commonwealth of Australia. Victoria has a very low net debt burden. From a peak of A$32.7 billion in 1994, the state's total public sector net debt has fallen to only A$2.5 billion, or 9% of operating revenue, in 2002. The state's unfunded superannuation (pension) liability does exert a larger burden. However, the net financial liability burden, which combines net debt and unfunded superannuation, is still very low, at about 55% of operating revenue. Government policy currently
