Executive Summary
New Zealand in December 2009. Previous projections have been
adjusted for these, to ensure comparability across years.
(Q2, 2009)
Japan, The Treasury
strategy is to return to surplus as
quickly as is practical.
in part to the positive impact of Budget
2009 decisions to restrain the rate of
growth of government spending.
of explosive debt levels which the
Government faced in late 2008, net
debt is now forecast to peak at 27% of
GDP in 2014/15, falling to 14% of GDP
at the end of the projection period in
2023/24.
Government to absorb some of the impact of the shock and protect New Zealanders from
the hardest edges of recession. But with the crisis receding and the economy growing
again, now is the time to start bringing the accounts back into surplus.
management to deal with the effects of the global financial crisis and the huge lift in
Government spending during the boom years leading up to that crisis.
vulnerability to future shocks, limits the increase in finance costs, and provides future
Governments with more fiscal options.
important for New Zealand in light of
the country’s high net foreign liabilities
(see Figure 10). We have seen
increasing concern about public debt
in recent times, and a number of
countries around the world are having
to consider or enact painful cuts to
public services or increase taxes as a
result of unsustainable debt levels.
net external debt positions in the world
– reflecting a combination of
household, business and government
debt. Low government debt before the
crisis had been one of the offsetting considerations to both international investors and
rating agencies when they were assessing the country’s riskiness. This cannot be taken
for granted. The Government is committed to continuing maintaining New Zealand’s
creditworthiness and limiting the cost of credit to domestic borrowers.
