Govt’s borrowing tricks show debt target is bogus

new-zealand-national-party

Fri Aug 31 2018 12:00:00 GMT+1200 (New Zealand Standard Time)

Govt’s borrowing tricks show debt target is bogus

Friday, 31 August 2018, 1:58 pm
Press Release: New Zealand National Party

The Government’s claim to be fiscally responsible while making extravagant spending

promises has been shown up as bogus, with the Treasury confirming it had deep concerns about debt hidden off-balance sheet, National’s Finance spokesperson Amy Adams says.

“The Government has claimed it will reduce net core Crown debt to 20 per cent of GDP – but they’re doing this by hiding billions of extra borrowing in Crown entities like Housing NZ.

“Documents released this week show Treasury was pushing back on the hidden borrowing, saying it could hurt the credibility of the Government’s fiscal strategy, harm New Zealand’s reputation as a borrower, lift interest costs and lead rating agencies to conclude it was ‘an attempt to circumvent the net core Crown debt target.’

“That’s an extraordinary list of concerns. In fact, Treasury even went so far as to say the move would undermine the credibility of the budget responsibility rules themselves.

“This goes straight to the heart of the Government’s fiscal credibility because it set the debt target in an attempt to counter concerns about its lack of economic credentials.

“Meeting the target was already looking improbable but now it also smacks of sleight of hand. This week NZIER predicted that the Government would fall $2 billion short of meeting its self-imposed debt target – and that’s before you factor in the extra $6 billion of off-balance sheet debt buried in the small print of Budget 2018.

Advertisement - scroll to continue reading

“The Government has needed to massively increase spending and borrowing because it over-promised and hadn’t budgeted properly.

“Added to that is a pattern of poor investment decisions – with things like billions for New Zealand First’s pet projects and a tertiary fees-free policy that isn’t delivering any extra students.

“National believes in sensible, consistent economic policies that encourage businesses to grow and it wants New Zealanders to keep more of what they earn. That may seem old-fashioned to this Government’s out-of-touch Ministers but it is the path to prosperity.”

Advertisement - scroll to continue reading

a.supporter:hover {background:#EC4438!important;} @media screen and (max-width: 480px) { #byline-block div.byline-block {padding-right:16px;}}

Using Scoop for work?

Scoop is free for personal use, but you’ll need a licence for work use. This is part of our Ethical Paywall and how we fund Scoop. Join today with plans starting from less than $3 per week, plus gain access to exclusive Pro features.

Join Pro Individual Find out more

Find more from New Zealand National Party on InfoPages.