O'Farrell

But the top state-ratings analysts for Fitch Ratings, Standard & Poor's and Moody's Investors Service all dismissed the concerns this created, saying in interviews with Dow Jones Newswires that Mr. O'Farrell's warning isn't surprising.

Ratings Agencies Downplay Budget Gap in Australia Geoffrey Rogow 2011

"O'Farrell now has a lot of power and with that comes rising expectations he will achieve a lot of outcomes," said Peter Chen, a politics professor at the University of Sydney.

Ratings Agencies Downplay Budget Gap in Australia Geoffrey Rogow 2011

Mr. Chen said Mr. O'Farrell's most likely response to the revenue shortfall and increased spending on infrastructure and other items would be cuts to health care and education, both likely to damp popularity locally.

Ratings Agencies Downplay Budget Gap in Australia Geoffrey Rogow 2011

Despite the budget shortfall, Mr. O'Farrell has promised more spending, which UBS interest rate strategist Matthew Johnson says does provides valid medium-term reasons for concern, including a rise in the ratio of financial liabilities to revenue.

Ratings Agencies Downplay Budget Gap in Australia Geoffrey Rogow 2011

In his first week in power, conservative Barry O'Farrell said that in reviewing the budget left by his predecessor, he determined that the tax-revenue forecast would need to be revised markedly lower.

Ratings Agencies Downplay Budget Gap in Australia Geoffrey Rogow 2011

State Premier Barry O'Farrell said the government intends to introduce legislation to enable the sale early next year.

Australian State to Sell Power Generators James Glynn 2011

Barry O'Farrell, the newly elected premier of New South Wales, put it more succinctly: "People are sick of having drunks ruin their nights out."

Soft Landing Geoffrey Rogow 2011

Using a mixture of ramshackle scenery, animation and puppetry, Joseph O'Farrell, Miles O'Neil and Glen Walton draw you into a fantastical take on life in the Australian outback, featuring a host of extraordinary characters.

This week's new live comedy 2011

Mr. O'Farrell said the plans call for either the sale or lease of the Cobbora coal mine in Western NSW, which is part of the electricity-generation network.

Australian State to Sell Power Generators James Glynn 2011

Mr. O'Farrell's decision to reveal shortfalls in the state's budget so soon into his tenure does provide a benefit for him: a platform to remodel the finances of New South Wales.

Ratings Agencies Downplay Budget Gap in Australia Geoffrey Rogow 2011