Public debt climbs by $27m a day
Government debt has reached $60 billion, having climbed $27 million a day since John Key became prime minister - and forecasts show it will rise for years to come.
Despite tax revenue being higher than expected and expenses lower in recent months, Treasury figures show net Crown debt reached the highest yet at $60,015,000,000 at the end of September.
It already equates to 28 per cent of New Zealand's economic output, is more than $13,000 for every person in New Zealand and is forecast to climb by another $10b by 2017.
When National took control of the Beehive in 2008, debt was just over $10b, but Finance Minister Bill English said it inherited an expanding public sector at a time when the economy was shrinking.
"The financial crisis cut government revenue just at the time when its spending was rising pretty sharply," he said yesterday.
Since that time the economic recovery had taken longer than expected and there were added costs from the Canterbury earthquakes.
Treasury forecasts, which were last updated around May's Budget, show debt increasing every year until at least 2017, which is as far as its forecasts run.
Since the Budget the economy has generally performed better than expected and Mr English appeared to hint that next month's half-year update would show debt forecast to start dropping in the future.
"We can now see on the horizon an actual reduction in the dollar amount."
While it was likely to take discipline, Mr English said he could "see a time" when debt was less than 10 per cent of economic output.
"New Zealand is going to have to deal with its ageing population, and it's important that we get that debt down while those numbers of older people are still lower because as they rise there'll be a lot of upward pressure on debt," he said.
Labour finance spokesman David Parker said that in the first update after National become government, debt was forecast to be $45b in 2013, and only a third of the difference related to the impact of the earthquakes.
National had weighted its tax cuts towards high-income earners; if it had directed it towards those on lower incomes it would have boosted consumption and consumption tax, he said.