Overseas debt figures due out tomorrow are likely to show an unhealthy increase in the total debt that is owed by New Zealanders to foreigners, Alliance leader Jim Anderton says.

And he says the overseas debt, along with the precarious balance of payments deficit, is so serious that no economic policy will have credibility at this year's election unless it specifies what to do about the debt problem.

Jim Anderton is challenging other finance spokesperson to spell out how they will get debt and the balance of payments under control.

"The Government will try to tell us that we don't need to worry because public debt is decreasing. Unfortunately, the total overseas debt has to be repaid and all New Zealanders will contribute part of their income, one way or another, through direct repayments, higher interest charges, lower wages and lower profits. New Zealand doesn't earn enough to pay off its total overseas debt now, which means our overseas debt is getting worse and worse.

"A year ago the overseas debt totalled $100 billion - equal to everything the entire economy produces in a year. This level of foreign debt is considered to be very high by economists and is one of the factors that has stopped the so called 'recovery' from really getting off the ground.

"It represents a significant reduction in the amount of control that New Zealanders have over their lives. With this level of foreign debt we are firmly in the grip of international moneylenders.

"Internationally, interest rates are rising. With $100 billion of debt, every 1% increase in interest rates costs us another billion dollars in extra interest charges. If the international economic situation deteriorates, interest rates could easily increase significantly. The devastating effect on New Zealand's economy is obvious.

"The Government's economic management has increased New Zealand's total overseas debt from $55 billion in 1990 to over $100 billion today. Tomorrow's figures look set to show another substantial increase.'

"And yet we are told that there is no real problem here. If National continues to keep its head in the sand this massive debt will continue to build, burdening generations of New Zealander's and handing control of our country to foreign multinationals," Jim Anderton said.

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