NZ Government Debt Keeps Growing
June 7, 2011 New Zealand Finance
The New Zealand government’s debt has grown even further over the month of April, now reaching NZD 71.6 billion.
The New Zealand Treasury has released the financial statements for the New Zealand government for the 10 months ending April 30th, which showed that the government’s debt has continued to grow. The statements, which were published May 10th, show that the government’s gross debts are now NZD 2.9 billion higher than previously forecasted, equivalent to approximately 4.2 percent above estimates. The debt increase was largely attributed to fluctuations in the value of the New Zealand dollar, which added approximately NZD 842 million to their value. An unexpected jump in the demand for government bonds has also increased debt levels by NZD 751 million.
The latest debt figure is NZD 19.6 billion higher than at the same point in 2010, with the extra borrowing adding approximately NZD 559 million to the government’s debt servicing costs.
According to figures in the statements, the government has seen approximately NZD 42.3 billion in tax revenues over the 10 months. The realized collections are NZD 86 million below forecasts for the period.
The Labour Party and the Council of Trade Unions have both already struck out at the newest figures, saying that the government is borrowing approximately NZD 100 million more than it needs to every week. The Finance Minister Bill English conceded that borrowing has increased recently, but said that the reason was a series of favorable economic conditions which allowed the government to front load some borrowing and use the funds to pay for rebuilding of Christchurch.
Photo by thornj