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First surplus a blip on radar screen of debt

Bill English’s first surplus is just one black drop in a sea of red, with New Zealanders still paying over $10m a day in interest payments, Labour’s Finance spokesperson Grant Robertson says.

“The Finance Minister has finally found a surplus needle in his haystack of debt. Despite promising a ‘significant’ surplus, it’s just $414m. That’s less than 0.2 per cent of GDP – a rounding error, not a surplus.

“Gross debt is more than $86 billion – the highest since Rob Muldoon stalked the corridors of the power. Interest payments alone are now $13 million a day and rise to $15m a day in three years.

“Instead of running a budget with revenue easily outstripping spending, National only reached surplus by manipulating the books – delaying spending on the Canterbury rebuild, underspending in health and education, and overcharging ACC by $350m.

“Without such trickery National would be in deficit again.

“And that’s at the peak of the economic cycle when New Zealanders would rightly expect the books to be in the black.

“But the surplus show is over before it has begun. With the economy running out of steam, National’s promises of a string of surpluses are extremely unlikely to become reality. That’s poor financial management.

“There is very little for National to crow about in its accounts.

“National’s financial management will go down in history as one small surplus – at the peak of the economic cycle – out of nine Budget deficits.

“At the peak of the cycle the previous Labour Government was able to post a surplus of $7 billion and had unemployment below 4 per cent, compared to nearly 6 per cent now. National likes to say it’s the party of economic credibility but on the surplus score it’s 9-1 to Labour over the last two governments.

“John Key and Bill English might want to pop the champagne corks for finally getting a surplus but in the absence of a plan for regional economic growth, decent work and higher wages it will leave most New Zealanders feeling pretty flat,” Grant Robertson says.