No credit rating upgrade

Written By: - Date published: 7:05 am, May 29th, 2009 - 15 comments
Categories: uncategorized - Tags:

Journalists around the country seem to think (even the learned ones) that the budget has brought about a credit ratings upgrade. Not true.

There has merely been a stabilisation of our current credit rating. An upgrade of Standard and Poor’s rating would be shifting from AA+ to AAA. That hasn’t happened.

The government’s spin has won over on this one. Stabilisation is not an Upgrade.

15 comments on “No credit rating upgrade”

  1. Mr Magoo 1

    Eddie, if they don’t call it an upgrade it would not be worth writing an article about. Nothing about it was a surprise.

    Thus they renamed it.

    Get with the program please. You can NEVER let reality get in the way of a good story.

    Basically, S & P was warning the country that if they spent up large like a large number of other countries they would downgrade us. National trimmed the budget and cancelled a number of big ticket items and thus the warning was stood down. (most importantly the permanent tax cuts which are the gift that keeps on cutting)

    Again, not surprising.

    • Bender 1.1

      True that Mr Magoo. Where otherwise is the story about little old New Zealand ‘making it’ with the credit agencies.

      Good stuff Eddie for pointing this out. I think it was Duncan Garner last night who said pretty directly we’d had our credit rating upgraded. Nonsense.

      • serpico 1.1.1

        Duncan Garner is nonsense.The idiot is on another delusional bender.

        • Bender

          serpico – I don’t want to be mean. But your comments don’t really add much do they? They’re like someone trying to construct a great piece of poetry and then throwing up all over it before they get to their point.

  2. burt 2


    I suspect you are disappointed that the country is not doomed under National but really just for a few moments take off the partisan hat and look at what is good for the country rather than what is appealing to your own personal ideology. I didn’t like the budget either, I think it was pathetically like a Labour budget and didn’t reflect the mood for change that saw the “socialist and proud of it bunch” turfed out.

    S&P upgrading our “outlook” to stable is significant, it is good news and it is a result of the direction set by National. You might not like to hear this but sadly Eddie – it is true and it is good for NZ.

    • Mr Magoo 2.1

      Just a clarification for you and Ernie:

      It is a result of the REMOVAL of direction set by National.

      Come on now. The rating was all about REMOVING their irresponsible tax cuts and reining in spending – mostly the former.
      There was nothing else in the budget that was relevant to this rating.

  3. bilbo 3

    Eh what … and here’s me thinking the government has been saying all along that “….. primary focus out of this budget is to avoid a ratings downgrade’.

    ……. and what Burt said ..Cullen and English two sides of the same coin.

    • Mr Magoo 3.1

      That line only started close to the budget Mr Baggins. That is what we call spin.

      Every budget has it, regardless of the party.

  4. tsmithfield 4

    It was not a technical upgrade. However, given that “stable” is better than “negative watch” the practical effect in terms of borrowing could be considered an upgrade.

  5. Nomestradamus 5


    You’re running a semantic argument here. I understand why you might argue that negative to stable, rather than a credit rating movement, is not an “upgrade”. But I think you should put this debate into its proper context. The prospect of a downgrade was quite real and, in fact, was probably already factored into financial market relativities (as tsmithfield says, with practical effect in terms of borrowing).

    For some interesting commentary, from an Australian perspective, see this article:

    Closer to home, there is increasing concern about the sovereign rating of New Zealand. In January this year, Standard & Poor’s revised its AA-plus foreign currency rating on New Zealand from stable to negative.

    S&P highlighted the country’s current account deficit, which is 8 per cent of GDP, and the country’s high level of external debt.

    S&P said that over the past five years net financial sector external debt doubled to about 200 per cent of current account receipts.

    The ratings agency forecast that New Zealand’s gross external financing requirement (current account deficit plus short-term external debt by remaining maturity) will rise to about 225 per cent of 2009 current account receipts.

    S&P said the negative outlook reflected the likelihood of a rating downgrade if external imbalances begin to pressure the country’s investment, growth and fiscal performance.

    A downgrade of New Zealand’s credit rating would raise the cost of funds and draw international attention to its large external imbalance. A downgrade could trigger a knee-jerk reaction and possible current account crisis.

    And this commentary:

    New Zealand is in deep trouble. Our mates across the ditch are mired in recession with no way out, and it should be ringing very loud alarms bells for Australia’s complacency.

    The Kiwis are facing a sovereign downgrade from Standard & Poor’s, as a result of which the Prime Minister, John Key, had to come out yesterday and promise fiscal consolidation in the next budget, rather than stimulus. That means fiscal policy will be straining against an already hopelessly impotent monetary policy.

    These are experienced business commentators and I think their analysis is fair. So, while I understand your semantic argument, I have to disagree with you about the substantive outcome.

    • Akldnut 5.1

      Nomestradamus – really good how you put that together but if you listen to Goff from 2.28 – 2.49 you wouldn’t give too high a “credit rating” to Standard & Poors “credit rating” of Nacts (dare I say it) OUR credit rating.

  6. Putting tsmithfield through the natspeak translator:

    When National doesn’t fuck up for an entire week, it’s doing better than the previous one.

    • gargle 6.1

      Putting Killinginthenameof through the labourspeak translator:

      Labour good National bad.

      Nuff said pip pip

      • felix 6.1.1

        This is so transparent it’s getting ridiculous. If you absolutely must use this vast range of sockpuppets the very least you could do would be to use different writing styles for each of them.

        Lazy troll.

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