The next Fabian Seminar at Connolly Hall Thursday 31 March at 5:30pm will feature economist Geoff Bertram examine how the high level of New Zealand’s overseas debt that figures prominently in much policy discourse is largely an increase in foreign-currency liabilities voluntarily taken on by mainly Australian-owned banks in pursuit of private profit.
Only to a relatively small degree is it a rise in the net liabilities collectively owed by New Zealand entities (households, firms, Government) to offshore creditors. Yet the overseas debt is repeatedly portrayed like a black cloud hanging over public discussion of the fiscal deficit, the case for and against sales of state-owned assets, the conduct of monetary policy, and the way the financial sector is regulated or not regulated.
Geoff’s paper dissects the overseas debt to understand (i) its anatomy (who exactly owes what exactly to whom, with what implications for the solvency of the national economy); (ii) the forces driving its increase in the past two decades, focusing especially on the funding mechanisms adopted by the banking sector; and (iii) some proposals for changes in policy to refocus the national economy in ways that might make it more robustly structure.
Geoff Bertram is an economist and author. His most recent work on this topic was written for the Institute of Policy Studies (Policy Quarterly Vol 5 No 1) and can can be found here. You can register for the seminar on the Fabians website.