As you know, National has been trying to justify selling off our assets and cutting our public services to pay for tax cuts for the rich by saying that debt is at dangerous levels and we risk a credit downgrade. Numerous commentators have shown that’s false. Now, the final nail in the coffin has come from credit ratings agency Standard & Poor’s.
In today’s, Herald is a front-page story that, by some editorial oversight, has been buried in the business section:
Standard & Poor’s surprised many late last year when it put New Zealand’s AA+ credit rating on “credit watch negative” signalling a one-in-three chance of a downgrade within two years.
A downgrade in New Zealand’s credit rating would lead to higher interest rates for government and private sector borrowing…
…unlike Key, Curry said Standard & Poor’s did not regard the state sector as “bloated and inefficient”.
“Generally, we look at the Government in New Zealand as being relatively small and compared to its peers it’s quite efficient.”
Furthermore, Curry said New Zealand was “relatively light” in government related entities.
He noted the Government’s plans for partial asset sales, “but if you look at what’s left, the sorts of government related businesses in New Zealand are quite minimal compared to a lot of other countries”…
… Curry said it was the business and household sectors’ dependence on foreign savings that was driving Standard & Poor’s negative outlook on the country’s credit rating
So, the public service doesn’t have fat to cut. When the government cuts it will be cutting the muscle from our public services. And its not government debt, which is one of the lowest in the world and set to peak in four years, which S&P is worried about but private debt, which the government has worsened by gutting Kiwisaver.
It’s time for Key to just admit why he really wants to sell our assets – so he and the elite can buy them, while using the cash the government gets to pay for more tax cuts for himself and the rich.
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