Remember all the doom and gloom about the country’s economic future and how the economy was going to hell in a hand basket and how business confidence was crashing?
Moodys must have missed the memo because they have recently confirmed New Zealand’s Aaa
AAA credit rating.
In response Grant Robertson has said this:
The Coalition Government is welcoming another sign that our economic plan and decisions to run surpluses and pay down debt are paying off for New Zealand, Finance Minister Grant Robertson says.
International credit rating agency Moody’s last night reaffirmed its Aaa rating with a stable outlook on the New Zealand Government’s financial position – the highest score it is able to give.
“In its latest update on New Zealand, Moody’s says the Government’s fiscal management has created the space needed for investment in areas like infrastructure, affordable housing, education
andpolicies to support families. This is exactly what we planned for at Budget 2018 – while continuing to live within our means by running sustainable surpluses,” Grant Robertson said.
“Moody’s says they expect New Zealand’s growth to be stronger in the next few years than other Aaa-rated countries. They also say our debt reduction track will see government debt fall significantly lower than other Aaa countries.
“As Moody’s notes, this is important because New Zealand is more susceptible to the classic rainy day – natural disasters and changes in the international economy – than some of our peers.
“That’s exactly why we are staying within the Budget Responsibility Rules. These include running sustainable surpluses, getting net debt down to 20% of GDP within five years, and making sure government expenses remain under control and in line with what Governments over the past 20 years managed.
The National Party has predictably not taken this well. Amy Adams has come out with this jumble of words. The headline “Moody’s praises National legacy now being eroded” makes no sense. Moody’s has maintained New Zealand’s current rating, not decreased it. And just to pick two examples Auckland’s Regional Fuel Tax allows for investment in much needed infrastructure and cancelling the last planned tax cuts allowed for investment in affordable housing, education and policies to support families and both results are important for continued economic stability.
Of course there is a very valid debate to be had on the Budget Responsibility Rules and if they are too tight. As noted by Robertson compared to other AAA rated economies our debt levels are very low even though National spent up large on the country’s credit card in its last term.