![]() ![]() In terms of how the Government will go about reducing its level of debt, there is talk they may have to introduce new or increase existing taxes. Tax hikes not the only way to pay down debt ![]() “Even after all this, we’re still going to be in a very good position,” says Alexander. They are showing no signs of issuing a potential downgrade in the wake of the Budget, he says.Ī peak net debt to GDP ratio of 53.6 percent is still lower than where other economies are at currently. “That gives me assurance that Grant Robertson does want to continue along the lines of finance ministers in New Zealand since the early 1990s of trying his best as possible to get good control over the quantity, and hopefully quality, of Government spending going forward.”Īlexander says that credit rating agency Standard & Poor’s believes New Zealand’s economic outlook is better than The Treasury is forecasting. Yes, in the short term they are, but in about five years’ time the ratio of the Government’s spending to the size of our economy will pretty much be back to where it was last fiscal year. “Some people may be looking at this as the Government spending a lot more. However, Alexander ( pictured left) says it’s important to remember there is no permanent increase in the size of the Government’s spending as a proportion of the New Zealand economy. Unsurprisingly, this has led to concern in some quarters. The Budget shows New Zealand’s net debt to GDP ratio is forecast rise to 30.2 percent this year and peak at 53.6 percent in 2023. ![]()
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