Debt Problems on Horizon

ACT New Zealand Finance Spokesman Sir Roger Douglas today pointed out the concern that all New Zealanders should have with the growing debt problem looming on the horizon.

"Last year Treasury released a document entitled ‘Challenges and Choices’ which highlighted the emerging problem with financing entitlements – primarily health and superannuation – when the baby boomers retire. Net public debt is expected to rise to 220 percent of GDP. Sir Roger said.

"This budget has completely ignored the emerging problems, with no changes to the entitlement structure. By putting the problem on the back-burner, the Government is essentially reducing the options we have to deal with the problem. When the problem comes to a head, we will have no option but to slash entitlements, which many are relying on during their retirement.

"Growth will not solve the problem, because growth increases wages and entitlements are based on wages. The budget fails to d

"These problems are indeed difficult to solve – but this Government seems unwilling to confront them and consider possible solutions. Until they do, they are only delaying the inevitable fallout from rising public debt," Sir Roger said.

ENDS

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