Dr Brash's comments on fiscal management welcome
18 September 2008 Media Statement
Dr Brash's comments on strong fiscal management are welcome
Finance Minister Michael Cullen has welcomed the strong words of support from former National leader Don Brash for the government's strong management of the Crown accounts in these challenging times for global credit markets.
"I welcome Dr Brash's level-headed assessment that the government's strong fiscal management is working in New Zealand's favour in these challenging times.
Dr Brash, who was Governor of the Reserve Bank in the 1990s before entering politics, noted in an extended interview with Radio New Zealand yesterday that New Zealand has high external liabilities because households' poor savings' record. The country's overseas debt is a challenge in an international economic environment in which the cost of credit is rising.
"Dr Brash said the strengths of New Zealand include the fact that the banks operating in New Zealand are in very good shape in terms of their balance sheets and prudent practices.
Dr Brash also noted the Government's strong management of its accounts is an important factor protecting New Zealanders from the rough edges of the global challenges.
Labour has slashed by half the level of Crown debt as a proportion of GDP while building up the financial assets of the New Zealand Superannuation Fund.
“What I hope is clear to most New Zealanders is that it would be a risky and reckless strategy for any serious political party to propose to purposefully go out and put a whole lot more New Zealand dollar-denominated debt into the market in the current environment.
"John Key's willingness to borrow for additional tax cuts in the tightest global credit conditions in over a generation is risky and irresponsible.