ACT Policy Would Have Averted Downgrade
ACT New Zealand Leader Dr Don Brash has called on Finance Minister Bill English to take responsibility for his part in New Zealand’s double credit downgrade.

The Government has blamed the downgrades on external liabilities and global financial turmoil, yet has avoided responsibility for the state of public finances and the effect this has had on New Zealand’s rating.

“Fitch cited public finances having ‘deteriorated in the past three years’ as one of the reasons for the downgrade. This, barely two months after NZIER stated that New Zealand had a ‘rotting fiscal core’, is an indictment of the Government’s failure to control its spending,” Dr Brash said.

“Today in the House, ACT’s Parliamentary Leader John Boscawen asked Mr English whether he agreed with Fitch that his failure to get public spending under control was partly to blame for the downgrade, and whether he thought the downgrade would be more or less likely had spending been reduced to 29 percent of GDP, as recommended by ACT and the 2025 Taskforce. On both Questions he dodged responsibility.

“Bizarrely, he responded that reducing spending could have made a downgrade more likely. Perhaps that’s why, under National, Core Crown Expenditure has increased to 36 percent of GDP. Apparently, in hoping for healthier finances, Fitch, along with NZIER, are asking too much.

“ACT set up the 2025 Taskforce as a condition of its Confidence and Supply Agreement with National in November 2008. ACT knew then that bold reform was needed for New Zealand to have any chance of catching Australia. Last week’s double downgrade and Mr English’s comments today prove that ACT was right. Sadly, the Government still has not got the message,” Dr Brash said.

ENDS

© Scoop Media