6. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
What issues does he believe are of most concern to credit rating agencies in respect of New Zealand: Government debt or the resilience of the wider economy?
Hon BILL ENGLISH (Minister of Finance) Link to this
Both of those issues are important to the economy, and the Government wants to make sure we get control of Government debt and increase the resilience of the wider economy. The Government will continue to do what is best for New Zealand; rating agencies will continue to form opinions on the results of our decisions.
Hon David Cunliffe Link to this
Is the Minister aware that Moody’s Investors Service rates New Zealand as having only a “limited debt challenge” and places New Zealand as being amongst the most resistant economies to the global downturn; if so, why has he been attempting to scare New Zealanders into accepting his Government’s contractionary policies and his leader’s broken promises?
That question is full of assumptions that are incorrect. The Government has set out to make the best decisions for New Zealand, according to our own judgment. The rating agencies will make whatever decisions they want to make.
Peseta Sam Lotu-Iiga Link to this
What previous approaches by New Zealand Ministers of Finance to dealing with rating agencies is the Minister aware of?
I can quote my predecessor, Michael Cullen, who said in 2006 “when rating agencies call they largely ask the questions and I supply the answers. What the agency wanted assurance about was that there would be no sudden lurching around in the Government’s fiscal policy”. That is a reasonable approach for any Minister of Finance to take, and it remains the case. I have been happy to brief rating agencies when major decisions have been taken, to assure them that the Crown’s finances are on a stable and sensible path.
Hon David Cunliffe Link to this
How can the Minister reconcile his statement to the House yesterday that “The Government actually has not talked about the credit rating agencies—hardly at all—since it came to office.” with his leader’s statement that “We have to make sure we don’t deliver deeper recession by allowing ourselves to blow our debt profile and threaten our international rating.”?
That is an entirely sensible reference to the fact that New Zealand has to borrow billions of dollars from overseas lenders, and lenders’ perceptions of this country matter.
Hon David Cunliffe Link to this
Does the Minister agree that it is a “nonsense” to suggest that New Zealand would have to borrow $50 billion extra by 2013, because any Government—National or Labour—would adjust its policy to ensure a sustainable fiscal path?