The Taxpayers’ Union says that the comments from credit ratings agency Fitch overnight represents a major threat to New Zealand’s public finances and New Zealanders’ living standards should the country see a credit ratings downgrade and higher costs of borrowing.

Taxpayers’ Union Economist Ray Deacon said:

“On budget forecasts, out last week, we’re already paying $10 billion per year in interest which is more than we pay on law and order or defence or school education and amounts to $5,092 per household.

“More borrowing to fund continuous government operating deficits is not a sustainable strategy. The Government simply has to get control of its expenditure and reduce it much more significantly than it has in Budget 2024. Yet another set of forecasts where a return to surplus is only at the end of the forecast period looks like a continuation of the game of kicking the ‘surplus’ can down the road.

“It would seem that Fitch might agree with us.”

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