Why won't Michael Cullen fight for our credit rating?

Tuesday 11th Jan 2000

Richard Prebble

Media Release -- Economy

Michael Cullen's refusal to advocate New Zealand's case not to have a credit downgrade will concern New Zealand's business community, says ACT Leader Richard Prebble.

"I know that leaders of the business community have themselves approached the Finance Minister urging him not to just accept the inevitability of a downgrade," Mr Prebble said.

"Dr Cullen's reluctance to got to New York, the world's financial capital, could be because he lacks confidence or alternatively he knows he can't answer tough questions, like what is the Government doing nationalising the personal accident compensation sector of business without compensation?

"Perhaps the reason is because he is still in the negative mind set of Opposition and isn't prepared to admit the New Zealand economy is booming, exports are up and no downgrade is justified despite what he said during the election campaign.

"I'm personally disappointed but not surprised that Dr Cullen dismisses an offer of assistance from another political party in such abusive party political terms.

"I have written to both Bill English and Winston Peters urging them to also call on Dr Cullen to start acting like a Finance Minister rather than his party's finance spokesman.

"I believe he could get assurances from parties that would strengthen his case for a credit upgrade," Mr Prebble said.

Attached: letter to Mr English

7 January 2000

Dear Bill

Re possible credit downgrade

As you know, the credit agencies are reviewing New Zealand's credit status with a view to a possible downgrade. As a former Treasurer, you will not have to be told how serious this is. I do not believe a credit downgrade is either justified or inevitable. Michael Cullen gives me the impression that he would welcome a credit downgrade to score a party political point. Or perhaps he just thinks there is nothing he can do. We know as former Finance Ministers that there is a lot he could do. If he went to New York now he could tell a good story about the economy. It occurred to me that if the Opposition parties gave him a letter indicating our support for the Reserve Bank's independence, for the Fiscal Responsibility Act, for balanced budgets and no overseas borrowing by Government - this might encourage the Minister to go to New York and fight for New Zealand's credit rating, and it would strengthen his hand in doing so. It is in no-one's interest to see a credit downgrade. So I am asking you to consider writing such a letter on behalf of your party. No doubt Dr Cullen may feel he also needs a letter from the Alliance and the Greens, but I think such a request is probably better coming from the Government. You may care to write directly to Michael Cullen. The issue is so important, I think we should try everything to avoid a credit downgrade.

Yours sincerely

Hon Richard Prebble

CBE LEADER, ACT NEW ZEALAND

cc: Rt Hon Jenny Shipley

ENDS

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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