Increase in public debt 'astronomical’

Press, 17 February 1984, Page 4

Increase in public debt 'astronomical’

PA Wanganui New Zealand faced the “horrific prospect” of having a public debt of $4O billion in 1988 under present National Government policies. bankers were told in Wanganui yesterday by the Opposition’s finance spokesman, Mr R. 0. Douglas.

This was a conservative estimate, Mr Douglas told members of a Trustee Banks Association conference.

The increase in the public debt since 1976 was astronomical, he said.

In March, 1976, the public debt — accumulated over a century of national development and including the heavy costs of two major wars — totalled $5588 million and, by March, 1983, $18,733 million.

“By March, 1985, the total will be about $25,000 million, an increase of some $19,500 million, or 450 per cent in nine years. “On a per capita basis, the public debt will have risen from about $l7BO a head in 1976 to nearly $BOOO in 1985. “In 1975-76, interest and

other costs of the public debt amounted to $73 million and this total will rise to $2070 million in 198384 and probably to about $2500 million in 1984-85.”

Mr Douglas said that in 1983-84 interest payments would total about $750 for each New Zealander and account for about 16 per cent of total Government expenditure, whereas in 1975-76 the comparable figures were $lB7 and 6 per cent.

“In 1975-76, debt interest was 12 per cent of income tax — in 1984-85 the comparable figure will be about 30 per cent." In only a few years, in 1988, on present National Government policies, the public debt would total about $4O billion, Mr Douglas said, and interest would absorb at least 20 per cent of total Government expenditure.

Mr Douglas said the Prime Minister and Minister of Finance, Sir Robert Muldoon, was a most expert debt-accumulator, “certainly his record is unsurpassed in New Zealand."