Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Government On Overseas Debt

Rt Hon Sir William Birch

Treasurer

Hon Bill English

Minister of Finance

15 June 1999

For Immediate Release

Overseas Debt

Treasurer Sir William Birch and Finance Minister Bill English said the slight increase in total overseas debt would be addressed by improving economic growth and by increased saving in the private sector.

The Ministers said the increase in overseas debt had slowed substantially in the past 12 months, with debt rising only 0.6% when discounting currency changes, and 2.4% in total.

"And it is important to note that public sector debt - which the government has control over - has continued to fall, by $2.6 billion.

"The debt figures reflect the same factors as the current account - high private sector borrowing offshore.

"The corporate sector borrowed an extra $3.5 billion in the year to March, and the stock of corporate overseas debt increased by another $1.4 billion because of the depreciation in the New Zealand dollar.

"Official sector debt (Crown debt excluding SOEs) on the other hand, saw the Crown repaying $3 billion of debt, offset by $0.4 billion of exchange rate losses, proving the worth of the Government's commitment to running surpluses and repaying debt."

Mr Birch said it was crucial at this time that the Government continued to run surpluses and reduce public debt.

" Labour and the Alliance's advocacy of high-spending government means higher taxes and higher debt.

"We have to continue to lead the way in saving, and to better encourage private saving among new Zealanders.

"The other thing the Government must keep doing is ensure that our economic framework continues to encourage productive investment.

"Businesses obviously don't borrow for the sake of it. They borrow to fund investment and business expansion. Businesses expect to see a return on their investment - as do the lending institutions.

"About 60% of the increase in corporate debt is non-bank borrowing - clearly for business investment.

"We should make sure that nothing prevents investment moving into the most productive sectors of the economy."

The Ministers said it was also important to understand the nature of the debt figures, given Jim Anderton's capacity to misrepresent them.

"This is a gross debt figure, there is no account of the assets behind the debt, or that the borrowing is being used to purchase.

"Total overseas debt figures do not mean that Government or the taxpayer are more indebted. Taxpayers have become less indebted because of the large fall in public debt.

"What they show is that NZ businesses and NZ individuals are investing more, and that they are raising off-shore capital for business development or to buy houses.

"Our strong, commercial banking sector, means these loans are viable. They require an asset behind them, and an income to finance them. It is just the same as buying a house. The person isn't in debt for no reason. They have an asset - the house - and an income to allow them to take out the loan.

"Focusing purely on the debt they have ignores the value of the house they are buying, or the income they have which will allow them to service, and pay off the debt. It reflects one side of the ledger only."

Ends

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Passports And IDs Left Online: Privacy Breach On Tuia 250 Aplications

The Ministry for Culture and Heritage yesterday revealed it had mistakenly exposed the sensitive details of about 300 mostly young people online...

Technology commentator Paul Spain said while most of the information was gone from the internet, the question was who had accessed it while it was online.

"This could be a problem for them for months if not years to come because others are now able to impersonate them and they could do all sorts of things when they [can] pretend to be someone else." More>>

 

Cutting Tape, Rasing Super Age, Cutting Business Payment Times...: National's Economic Discussion Doc

National has today released its fourth Discussion Document, which focusses on the economy and outlines a range of policies that will help rebuild business confidence, Leader of the Opposition Simon Bridges says. More>>

ALSO:

Gordon Campbell: Why NZ Shouldn’t Try To Curry Favour With Trump

Dutifully, Denmark had lined up militarily alongside the US in Bosnia, Afghanistan, Syria and during the Iraq War. This means nothing. In a heartbeat, the current US President will trash any ally, and on the flimsiest of pretexts. More>>

Gordon Campbell: On The Commerce Commission Fuel Report

The interim Commerce Commission report on the fuel industry will do nothing to endear the major oil companies to the New Zealand public... More>>

ALSO:

Emergency Govt Bill: Overriding Local Licensing For The Rugby

“It’s pretty clear some clubs are having difficulty persuading their district licensing committees to grant a special licence to extend their hours for this obviously special event, and so it makes sense for Parliament to allow clubs to meet a community desire." More>>

ALSO:

Leaving Contract Early: KiwiBuild Programme Losing Another Top Boss

Ms O'Sullivan began a six-month contract as head of KiwiBuild Commercial in February, but the Housing Ministry has confirmed she has resigned and will depart a month early to take up a new job. More>>

ALSO:

Proposed National Policy Statement: Helping Our Cities Grow Up And Out

“We need a new approach to planning that allows our cities to grow up, especially in city centres and around transport connections. We also have to allow cities to expand in a way that protects our special heritage areas, the natural environment and highly productive land." More>>

ALSO:

Ombudsman's Report: Ngāpuhi Elder 'Shocked' By Conditions At Ngawha Prison

A prominent Ngāpuhi elder is shocked to find inmates at Ngawha Prison are denied water and forced to relieve themselves in the exercise yard... Chief Ombudsman Peter Boshier has released a report highly critical of conditions at the Northland prison. More>>

ALSO:

Promises: Independent Election Policy Costing Unit A Step Closer

The creation of an entity to provide political parties with independent and non-partisan policy costings is a step closer today, according to Finance Minister Grant Robertson and Associate Finance Minister James Shaw. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels