Hon Dr Michael Cullen
Minister of Finance

18 June 2008 Media Statement

Moody’s re-affirms rating; says Nats pro-privatisation

Moody’s Investors Service’s re-affirmation of New Zealand’s sovereign credit rating is a vote of confidence in New Zealanders and in the government’s policies, Finance Minister Michael Cullen said today.

“In its report released yesterday Moody’s says New Zealand is among the strongest Aaa-rated countries in terms of the state of government finances,” Dr Cullen said.

“The re-affirmation of our credit rating is a vote of confidence in the government’s social, investment and tax reduction policies and it is a stark contrast to what happened under National,” Dr Cullen said.

Moody’s New Zealand sovereign credit rating was put on negative outlook and then downgraded in the late 1990s, the period when Bill English was a finance minister in a government that carried higher Crown debt levels than today, borrowed offshore to fund tax cuts and tried to cover its tracks by selling State Owned Enterprises, under-investing in infrastructure and cutting the floor of NZ Superannuation.

“It is unclear what National’s economic policies in 2008 actually are, although it is a worry that Moody’s says in its report that the National Party is likely to be more favourable to selling off State assets,” Dr Cullen said.

“National needs to be honest about whether they are telling the public one thing and international credit rating agencies something different when it comes to asset sales because most New Zealanders reject National’s pro-asset sales intentions,” Dr Cullen said.

The last National government which had Bill English as a finance minister spent over $47 million in just one financial year on consultants to help sell State assets, with about $5 million of this going to Merrill Lynch alone to help sell the Crown’s shares in Auckland International Airport.

ENDS

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