NZ’s $60b debt big concern for possible recession

New warnings of a global recession places the spotlight on New Zealand’s $67b net debt, leaving the economy in a much worse state than before the 2008 downturn when net debt was zero, says Labour’s Finance spokesperson Grant Robertson.

“Despite claiming the figleaf of fiscal responsibility the latest government accounts show that National has racked up over $67b in net debt. With Citigroup warning of a global recession that level of debt will be an albatross around the neck of the government if the downturn occurs.

“Bill English likes to pretend New Zealand will be insulated from any international downturn, saying we came through the previous one better than other countries. That’s because Michael Cullen had reduced net debt to zero – for the primary purpose of preparing New Zealand for a ‘rainy day’.

“After seven years of National, the finances are in a much worse state to deal with any recession.

“While some of that debt is justified, especially in the Christchurch rebuild, the problem is Bill English’s complacent attitude – real economic growth has ground to a halt and he is in no hurry to re-balance the New Zealand economy.

“This year is set to be the most volatile in almost a decade. The threat of a major economic downturn is real. Bill English must take it seriously.

“New Zealanders need a government that is an active partner in growing the economy, keeping the Kiwi dream alive and preparing for the future, not the bunch of distracted bystanders we currently have,” says Grant Robertson.