Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Overseas debt difficulties worsen

Alliance leader Jim Anderton says overseas debt figures released today are very serious, and will mean higher interest rates and fewer jobs.

“The overseas debt is turning into such a deep swamp that any Government is going to have to take strong measures to get it under control, and all parties face the challenge of saying now what they intend to do.

“Total overseas debt is still increasing faster than GDP is growing. The economy is getting deeper and deeper into debt. Corporate debt increased by around $100 million a week last year.

“Public sector debt was only decreased by asset sales, and those asset sales will mean that more profits flow out of the country in the future and make overseas debt worse.

“The total overseas debt has to be repaid, one way or another, by New Zealanders, through higher interest rates, lower wages, lower profits. It will result in less jobs since every dollar that goes out of the country to service debt is a dollar that isn’t invested in New Zealand.”

Jim Anderton ridiculed claims from the Government that the total level of overseas debt doesn’t matter because it doesn’t show the asset backing.

“Ministers making that statement are fully aware that they don’t even have any evidence that the asset backing has grown. It’s like saying to your bank manager ‘don’t worry about all this extra money I’m borrowing, because I’m using it to buy lots of very attractive new household items.’

“The debt is out of control, expanding alarmingly, and the Government doesn’t even recognise the problem, let alone have any idea what to do about it.”

The rise in short-term ‘hot money’ liability was a particular concern identified by the Alliance.

“Some 43% of the total overseas debt falls due within twelve months with most of the increase coming in 90-day debt. That is known as ‘hot money’ and if the owners of it all decide to leave at the same time our economy will be in very serious trouble. This could happen, for example, in response to balance of payments figures due out this Friday, or perhaps even if Max Bradford takes over a Finance portfolio.

“New Zealand’s increasing exposure to ‘hot money’ liability illustrates the loss of sovereignty that has resulted from the National Party creating more and more total overseas debt,” Jim Anderton said.

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Veronika Meduna: The Kaikoura Rebuild

A Scoop Foundation Investigation

Friday will be a big day for people north of Kaikōura – and for hundreds of construction workers who are racing to reopen State Highway 1 in time for the holiday season.

By the afternoon, the South Island’s main transport corridor will be open to traffic again, more than a year after a magnitude 7.8 earthquake mangled bridges and tunnels, twisted rail tracks and buried sections of the road under massive landslides. More>>


BPS HYEFU WYSIWYG: Labour's Budget Plans, Families Package

“Today we are announcing the full details of the Government’s Families Package. This is paid for by rejecting National’s tax cuts and instead targeting spending at those who need it most. It will lift 88,000 children out of poverty by 2021." More>>


Gordon Campbell: On Defence Spending, Alabama, And Dolly Parton

The spending lavished on Defence projects to meet the risks that could maybe, possibly, theoretically face New Zealand in future is breath-taking, given how successive governments have been reluctant to spend even a fraction of those amounts on the nation’s actual social needs. More>>


Members' Bills: End Of Life Choice Bill Passes First Reading

The End of Life Choice Bill in the name of David Seymour has been sent to a select committee for consideration by 76 votes to 44. It is the third time Parliament has voted on the issue in recent decades and the first time such a Bill has made it over the first hurdle. More>>


State Sector: MPI Survives Defrag Of Portfolios

The Ministry for Primary Industries will not be split under the new government, but will instead serve as an overarching body for four portfolio-based entities focused on fisheries, forestry, biosecurity and food safety. More>>


Gordon Campbell: On Vulnerable Kids, RNZ Funding, And Poppy

The decision to remove the word ‘vulnerable’ from the Ministry for Vulnerable Children could well mark a whole shift in approach to the care of children in need... More>>





Featured InfoPages