Adding to the ignominy for Treasurer David Janetzki, the loss of Queensland's AA+ rating with credit agency S&P Global came on the same day NSW received an upgrade to its credit outlook.
Queensland's forecast budget performance for the next two to three years was "very weak" compared to other states with the same rating, S&P said on Friday.
It was bumped down to the same league as the mendicant states of Victoria and Tasmania.
The state's mammoth infrastructure program ahead of the 2032 Olympics and forecast deficits contrasted with previous expectations for sound surpluses from 2028, the agency said in a report.
"Persistent inflation, rising interest rates, higher wages and softening property market sentiment will likely weigh on Queensland's budgetary outcomes and fiscal recovery over the next two to three years," it said.
The state could also expect lower stamp duty revenues after property tax changes in the federal budget exacerbated a deepening housing downturn, S&P said.
As well as laying the blame with the previous state Labor government's "fiscal vandalism", Mr Janetzki said stamp duty had fallen off a cliff because Jim Chalmers had "cratered" confidence in the property market.
Queensland's stamp duty revenue was $223 million lower in the first two months of the financial year, which Mr Janetzki said would result in about $1 billion in reduced revenue in 2026/27.
"Then there's Jim Chalmers' cost shifting: NDIS, stranded Australians, natural disaster funding. So there is a clear range of problems that we have that the federal government has failed to appropriately fund," he told reporters near Toowoomba.
In a separate broadside on his fellow banana bender, Dr Chalmers said Queensland had done very well out of the Commonwealth government under Labor.
Stamp duty had soared 58 per cent in Queensland in the past two years, he said, while GST payments from the federal government were almost $20 billion this year, up $2.6 billion compared to the year prior.
"A credit downgrade risks higher debt costs and less money for the services Queenslanders deserve," Dr Chalmers said in a statement.
"David Janetzki has some real questions to answer."
AMP chief economist Shane Oliver said the downgrade could add another 0.1 to 0.15 percentage points to Queensland's borrowing costs, and puts pressure on the Crisafulli government to announce further spending cuts.
"While some of the reasons for the Queensland downgrade were beyond the state government's control, this arguably could have been avoided if it had focused more on containing spending after the last election," Dr Oliver said.
Queensland's June budget forecast a deficit of $6.2 billion in 2026/27, with gross debt projected to exceed $200 billion by 2028/29.
S&P slapped a stable outlook on Queensland's AA rating.
It came shortly after the agency revised its outlook for NSW's AA+ rating from negative to stable.
"The stable outlook reflects our view that New South Wales' financial management will deliver cash operating surpluses and narrower deficits after capital accounts," S&P said.
The Minns government's "excellent financial management" was helping to contain expenditure growth, delivering sustained cash surpluses over the coming years, the agency said.
Population growth and household consumption may lead to stronger revenue growth in the 2026/27 financial year, offsetting softer stamp duty revenue.
NSW was the first state to have its credit outlook improved by S&P in the past three years, which was an endorsement of the the government's fiscal discipline, Treasurer Daniel Mookhey said.
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