Confirmation Of AA+ Credit Rating Welcomed
Finance Minister Nicola Willis has welcomed confirmation from Fitch Ratings that the Government's careful management of the books has preserved New Zealand's strong credit rating.
The international rating agency has affirmed New Zealand's AA+ rating with a stable outlook.
'At the moment New Zealand is borrowing overseas to continue providing good public services while we work to rebuild the economy and public finances,' Nicola Willis says.
'Historically, New Zealand governments have been able to borrow at reasonable rates because of their reputation for being responsible managers of public money, but that is not something that should be taken for granted.
'In the nicest possible language, Fitch's commentary contains a warning for New Zealand.
'Fitch says New Zealand's rating is underpinned by the Government's strong commitment to fiscal consolidation and an expectation that debt as a percentage of GDP will move to a downward path.
'However, Fitch warns that 'evidence of a weakening in the culture of fiscal commitment to fiscal responsibility would affect creditworthiness'.
'That is Fitch telling us that borrowing a lot more, as Opposition parties are proposing, would lead to a credit downgrade. That would increase the cost of government debt and also have a flow-on effect to the cost of household and business borrowing, as New Zealand would be seen as a more risky country to lend to.
'That is why this Government is committed to returning the books to surplus while continuing to invest in the public services New Zealanders need and shifting the economy onto a stronger growth path.
'Doing so requires some difficult choices, but the alternative is increasing costs for Kiwi households and businesses.'
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Confirmation Of AA+ Credit Rating Welcomed
Minister of Finance Finance Minister Nicola Willis has welcomed confirmation from Fitch Ratings that the Government's careful management of the books has preserved New Zealand's strong credit rating. The international rating agency has affirmed New Zealand's AA+ rating with a stable outlook. 'At the moment New Zealand is borrowing overseas to continue providing good public services while we work to rebuild the economy and public finances,' Nicola Willis says. 'Historically, New Zealand governments have been able to borrow at reasonable rates because of their reputation for being responsible managers of public money, but that is not something that should be taken for granted. 'In the nicest possible language, Fitch's commentary contains a warning for New Zealand. 'Fitch says New Zealand's rating is underpinned by the Government's strong commitment to fiscal consolidation and an expectation that debt as a percentage of GDP will move to a downward path. 'However, Fitch warns that 'evidence of a weakening in the culture of fiscal commitment to fiscal responsibility would affect creditworthiness'. 'That is Fitch telling us that borrowing a lot more, as Opposition parties are proposing, would lead to a credit downgrade. That would increase the cost of government debt and also have a flow-on effect to the cost of household and business borrowing, as New Zealand would be seen as a more risky country to lend to. 'That is why this Government is committed to returning the books to surplus while continuing to invest in the public services New Zealanders need and shifting the economy onto a stronger growth path. 'Doing so requires some difficult choices, but the alternative is increasing costs for Kiwi households and businesses.'
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