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Asset sales halve Govt. surplus, debt continues to pile up

17 December 2013

Asset sales halve Govt. surplus, debt continues to pile up

Treasury forecasts released today underline National's failure to build a strong, resilient, and jobs-rich economy, Green Party Co-Leader Dr Russel Norman said today.

Dr Norman was responding to the release of the Half Year Economic and Fiscal Update from Treasury that showed that despite GDP growth, unemployment will remain above five percent until 2018, net government debt will grow to $65 billion by 2016, and the current account deficit will widen further to 6.5 percent in 2017.

“National is failing to build a strong, resilient, and jobs-rich economy,” said Dr Norman.

“Treasury has today confirmed that National’s signature asset sale programme has cut the 2014/15 surplus by more than half to a paper-thin $86 million.

“Asset sales will leave the Government with a handy sum of money to spend in an election year while leaving us all $108 million worse off every year, forever.

“Net government debt will peak in 2016 at $65 billion, up $55 billion from the $10 billion of government debt on the books when National took office.

“One of the first tasks of a new Government will be to get National’s record pile of debt under control.”

Dr Norman pointed to several red flags for the New Zealand economy raised in the Treasury report.

“New Zealand's economic recovery is betraying the same underlying structural weaknesses as the last one under the Clark/Cullen administration; National has materially failed to rebalance our economy away from debt and consumption towards savings, investment, and exports,” Dr Norman said.

“Treasury are predicting the current account deficit to worsen to 6.5 percent of GDP by 2017. We are funding a large part of this economic growth cycle with debt, not income.

“Today’s figures also show that if John Key got two more terms as Prime Minister, unemployment would still be higher than when he first came to office. His Government has failed to create jobs and a prosperous economy for New Zealand families.

“National is failing our children – one in four of our children continue to live in poverty; failing our environment – our carbon emissions are set to climb dramatically in the next 20 years; and failing to manage our economy to in a prudent and balanced way to create good-paying jobs.

“We can build prosperity without getting us deeper and deeper into debt, but we will need a new kind of government to do it.”


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